Madrid Gets Ready for the Opening of 2,000 Luxury Hotel Rooms

7 January 2018 – Expansión

The hotel market in Madrid is enjoying a happy time. After years as the ugly ducking of Europe’s capitals, with barely any major luxury brands operating in the city, 2,000 luxury rooms are scheduled to open in the city centre over the next two years. “Spain had a very moderate number of five-star hotels in comparison with other global capital cities. Nevertheless, the Town Hall of Madrid implemented a strategic plan for tourism, which boosted the image of the city as a global destination and that attracted international companies, which are taking the city to their own tourist clients”, says Javier García-Mateo, Partner in Financial Advisory at Deloitte.

“The existing luxury hotel stock comprises around 5,000 rooms and over the next few years, another 2,000 rooms will be added, of which 1,000 will be new and the rest will be in renovated properties”, adds Félix Villaverde, Manager at Deloitte Financial Advisory.

The first hotel already opened over Christmas: the US hotel chain Hyatt Hotels has returned to Madrid, specifically, to the heart of the city with the opening of Centric Gran Vía Madrid, a five-star establishment with 159 rooms – including 16 suites (…). With an investment of €30 million, Hyatt has returned to Madrid, after leaving the management of another five-star hotel in the capital in 2009: the Villamagna.

During the first quarter of 2018, another five-star establishment is expected to open. In this case, it will be the chain VP in Plaza de España. It will contain 214 rooms, spread over 17 storeys, following an investment of €90 million (…).

Projects on the lookout for a brand

Some of the other new projects planned for this year in the luxury hotel market in Madrid have not yet been defined. They involve plans for the former Hotel Velázquez and the property owned by the fund KKH in Plaza de las Descalzas.

Last May, the Salazar family sold the Gran Hotel Velázquez for around €60 million. Now, the new owner, the real estate group Didra, is looking for a hotel partner to operate the renovated property. In the case of KKH’s property in Madrid, the negotiations are more advanced. The former headquarters of the Monte de Piedad de Madrid is being renovated to open a five-star hotel and a dozen brands have expressed their interest in operating it. The Park Hyatt, The Peninsula and Saint Regis, from the Starwood group, are the favourites in the running, according to sources in the sector (…).

In addition to these projects that still need to be defined, in 2019, several luxury establishments are due to open, including, the first Four Seasons Hotel in Spain, which will open in the Canalejas complex with more than 200 rooms.

Moreover, a four-star, but nevertheless high-profile, hotel is being created by the Mallorcan chain RIU, which will restore Edificio España, in disuse for a decade, to open a modern urban hotel with 650 rooms.

Meanwhile, Marriott Starwood, the largest hotel chain in the world, has teamed up with the Indian investor Harry Mohiani to open a five-star hotel in the former Hotel Asturias, in the same square as the Four Seasons (Canalejas). That property will have 160 rooms (…).


The opening of these new luxury hotels will have an impact on room rates, which already saw a significant increase in this niche last year.

“Revenue per room (RevPar) in the five-star segment in Madrid has grown by 6.4% p.a. in recent years, almost four times more than the average in other European centres, due not only to the increase in rates but also the better performance in terms of occupancy rates”, say sources at Deloitte.

“The arrival of new luxury operators in Madrid will drive up the price of five-star hotels in the city. In fact, after carrying out comprehensive renovations, we have already seen examples of hotels that have increased their rates by 50%. The most exclusive hotels will charge €750 per night during certain periods of the year”, they add.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Hotels Increase Revenues and Prices Spurred by Record Occupancy

24 August 2017

Spain registered a historic high of 44 million overnight hotel stays and a record occupancy of 73% in July. The data show increases in hotel rates of 7% and average daily revenues per room of 8%.

The recent successive tourism records are translating into historic highs in overnight stays and occupancy, and underline the hotel sector’s ebullience. In July 43.6 million overnight stays were registered in hotels, 1.6% more than in July 2016. Overnight stays between January and July increased by 3.8% and exceeded 190.6 million overnight stays, according to the latest report by Hotel Statistics, prepared by the National Institute of Statistics (INE).

11.8 million Spanish and foreign travellers stayed in hotels in July. The record figure lends credence to previous forecasts that 2017 will be a new record setting year, with more than 83 million arrivals. At the same time, hotel occupancy rates stood at 73.1% (an increase of 0.7%). In the case of weekends, occupancy rates rose to 77.3%, an increase of 2.2%.

Areas that are traditionally the focus of tourism are at the centre of data on hotel occupancy. The Balearic Islands reached a rate of 90.7% in July, accounting for 34% of total overnight stays in Spain, followed by the Canary Islands (83.6%) and Catalonia (77.7%). Barcelona continues as the most favoured city with an 83.9% occupancy rate. Looking at total overnight stays, the most crowded area has been Mallorca, with 8 million overnight stays and an occupancy rate of 92%. As for average stays, Pájara, a municipality located in Fuerteventura, registered an average stay of 8.42 days.

These figures are great news for the hotel sector, which continues to increase revenues and raise prices per room. Thus, the Hotel Price Index (IPH) increased by 6.9% in July. The Balearic Islands, Catalonia, the Canary Islands and Andalusia accounted for 76.9% of the HPI.

The rate hotels charge on average for each room stood at 98.5 euros. This is an increase of 6.1% compared to July 2016. Likewise, the average daily income per available room (RevPAR) rose 7.9% in July, to 74.8 euros. In the Balearic Islands, the same figure amounted to 105.8 euros (4% more), while in Catalonia it soared 16%, to 86.8 euros.

The Circle Widens

Although the countries in the European Union continue to lead overnight stays, accounting for 80.3% of the total number of foreign visitors, tourism from countries further afield is growing at a faster pace. In fact, while visitors from countries like France, the United Kingdom and Belgium fell by 7%, 5% and 4%, respectively; overnight stays of tourists from Russia and Japan soared by 24% and 20%. In the case of the United States, the increase was 16% in July. Germany would be the exception that confirms the rule. The increase of overnight stays of German tourists amounted to 9%.

Although the number of overnight stays continues to increase, the sector faces several challenges that will permit hotel revenues and prices to continue to increase. The first involves the democratization of transport, where people will be able to travel more for less money, but over shorter periods of time.

Specifically, the Spanish government, through the Secretary of State for Tourism, announced a strategic plan focusing on quality tourism, whose economic impact is coupled with the record arrivals. So far, Spain ranks second in the world in terms of revenues from tourism, with €54 billion, according to the latest ranking of the World Tourism Organization, only behind the United States, which is favoured by visitors from more countries around the world, who have more purchasing power and stay for longer periods.

The second challenge is related to the disruptive entry of new players into the field of tourist accommodations. Vacation rental platforms have revolutionized the sector, to the point where the places they offer are more than double the number of hotel rooms in the main cities. The impact of the boom of these platforms has placed constraints on occupancy rates, prices and revenues in the formal hotel sector, which is subject to greater regulatory oversight.

Original Story: ProOrbyt Expansion – Inma Benedito

Translation: Richard Turner


Optimism Abounds Amongst Spain’s Hotel Chains

10 April 2017 – Expansión

Meliá, Barceló, RIU and other groups are hanging the “No vacancy” sign up in top destinations and are increasing their prices, thanks to the pull of the overseas market and the recovery in domestic tourism.

The tourism sector is on a roll and the main Spanish chains – Meliá, Barceló, Iberostar, RIU, Grupo Piñero and Palladium – are getting ready to break records once again. The positive trend in demand, the pull of international tourism in both archipelagos, and the recovery in the domestic market in regions such as Andalucía are allowing the hotel groups to hang the “No vacancy” sign up in some of their destinations, such as in the Canary Islands, and achieve occupancy rates of between 80% and 90% in the Balearic Islands and Andalucía.

Despite the uncertainty generated by Brexit, the British market remains a mainstay for the hotel chains, alongside Germany and Central Europe, in addition to the recovery in domestic demand.

For example, Meliá forecasts growth of more than 6% in its average occupancy rate in vacation hotels in Spain, as well as an improvement in prices with respect to 2016. The markets with the greatest pull for the chain owned by the Escarrer family are the British and Central European, whilst demand from domestic tourists continues its upwards trend.

Meanwhile, Barceló forecasts growth of 6% in its occupancy rate at hotels in the Balearic Islands, with an average occupancy rate of 81% and an average room rate of €110, which represents an increase of 13% with respect to the previous year. In terms of Andalucía, the volume of reservations corresponds to forecast occupancy rates of more than 90% and an improvement of 26% in prices, according to the company.

In the case of Iberostar, the hotel chain owned by the Fluxá family forecasts an occupancy rate of almost 100% over the Easter holidays. Iberostar highlights the good performance of the United Kingdom, Benelux and Germany, compared with countries in Eastern Europe, where demand is “more stagnant”.

In terms of room rates, Iberostar states that prices have improved moderately, by between 2% and 3% on average.

For RIU, the economic situation in the Canary Islands, with very high occupancy rates, means it has little margin for growth, however, there is still scope for increases at the hotels on the Costa del Sol, which have been completely refurbished this season. (…). In terms of the best markets, RIU highlights German tourists, as well as a considerable improvement in the number of reservations from Scandinavian and British clients, plus a 5% increase in domestic tourism.

Meanwhile, Palladium highlights the sweet moment that Ibiza is enjoying. “The season has opened early on the island, with a large volume of tourists visiting in April. This has been made possible by hotels opening early and new flight connections”. Overall, hotel occupancy rates have risen by 4%, whilst prices have increased by 2.5% YoY, for the time being, in line with the annual forecast increase of 7%.

Finally, Grupo Piñero says that its three hotels in Tenerife area already full, with an improvement in prices of between 4% and 8%.


And the euphoria of the hotel chains extends beyond Easter. The large hotel groups expect to set new records in 2017. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

INE: Overnight Hotel Stays Rose By 7.4% YoY In July

24 August 2016 – Expansión

The Balearic Islands, Canary Islands and Valencia recorded the highest occupancy rates during the month. There was no “Brexit effect”: the British market grew by 15%. The sector believes that it has recorded from the losses of the crisis.

The tourism sector has moved full steam ahead during the first half of the year and, above all, so far this summer. In July, there were 42.8 million overnight hotel stays (28.1 million foreigners and 14.6 million Spaniards), up by 7.4% compared with the same month in 2015, when the figure had risen by 6% YoY. There are two main drivers of this acceleration: overseas tourists, whose stays increased by 8.2%, and Spain’s own residents, whose stays rose by 5.7% in July compared with last year, according to data published yesterday by INE. Sources in the sector consider that the problems of the crisis, above all in terms of the domestic market, are now behind us.

The autonomous regions with the highest occupancy rates during the seventh month of the year were the Balearic Islands (91%), the Canary Islands (84.9%), Valencia (77.9%) and Cataluña (75.8%). The most successful area in terms of the number of beds occupied was the island of Mallorca, with a 92.1% occupancy rate and Palma-Calvià, which achieved a higher occupancy rate on the weekends (90.9%). In terms of total overnight stays, the most popular area was the Costa del Sol, with more than 2.3 million overnight stays during the month.

And not only did the number of overnight stays rise, hotel prices also increased in July: by 7.5% compared with a year ago, which represents an increase of 1.5 points over the rate obtained then (6%). Again, the autonomous regions that contributed the most to this increase were the Balearic Islands (with a YoY increase of 10%), Andalucía (8.9%), the Canary Islands (8%) and Cataluña (5%).

In addition, the average revenue per room occupied stood at €93.20, up by 6.3% YoY. By hotel category, the average income was €208.40 for five-star properties; €102.40 for four-star hotels and €79.40 for three-star establishments (…).

In addition to the economic recovery, which has relaunched domestic demand after it was significantly depressed during the crisis, one reason that explains the strong tourism figures in Spain is the difficulties that competing countries are facing, such as Turkey, whose tourist market is experiencing decreases of 30% following the terrorist attacks in recent months, and Egypt, with a decline of almost 70%, following five years of political and social instability since the outbreak of the Arab spring (…).

For the time being, the figures do not reflect any negative effect from Brexit in terms of the arrival of British visitors. Quite the opposite: in July, Brits recorded 1.28 million overnight stays in Spain, up by 15% compared with the same month in 2015. “So far in 2016, the British market has grown by 20%”, said Juan Molas, Chairman of the Spanish Confederation of Hotels and Tourist Accommodation (CEHAT), who revealed that reservations made by tour operators for the winter season (November-April) already reflect an increase of 16% compared with the same period last year.

Despite the general recovery in terms of overnight hotel stays, sector representatives are still warning about the increase in the use of unregulated establishments through platforms such as Airbnb, Homeaway and Niumba, amongst others. “The use of these services unbalances the tourist model”, said Inmaculada Benito, Chairwoman of the Hotel Business Federation in Mallorca. A war has been declared on these types of businesses in cities such as Barcelona.

Original story: Expansión (by Yago González)

Translation: Carmel Drake

INE: Hotel Prices Up By 17.7% So Far This Year

16 August 2016 – El Economista

The price of hotels and other accommodation increased by 17.7% during the first seven months of 2016, according to data published by Spain’s National Institute of Statistics (INE).

Nevertheless, prices in those establishments fell by 2.4% in July compared with the same month last year, after they had increased by 3.7% compared with the previous month.

On the other hand, the price of air transport in Spain decreased by 3.8% in July compared with the same month in 2015. Meanwhile, air travel prices increased by 5.2% with respect to June and by 6.7% cumulatively during the seven months to July.

In terms of road transport, prices rose by 0.4% in July compared with July 2015. With respect to June, those prices remained stable (0.0%) and rose slightly (+0.1%) cumulatively during the year to date.

Meanwhile, the price of railway transport rose by 0.3% in July compared with the same month in 2015. There was no change in railway prices compared with the previous month, and during the seven months to July 2016, the increase amounted to 0.1%.

Original story: El Economista

Translation: Carmel Drake

Spanish Hoteliers See No ST Threat From Brexit

3 August 2016 – Hotel News Now

Spanish hoteliers said they have yet to see any immediate negative impact on tourism from the U.K. since that country voted to leave the European Union.

“Spain has long been, and should remain for the foreseeable future, the favored vacation destination for British visitors despite Brexit, and all indications are that bookings well into next year are still healthy,” said Juan Molas, President of the Spanish Confederation of Hotels and Tourist Accommodations (CEHAT), during a 28 July news conference.

The U.K. is Spain’s largest source market for foreign visitors. Last year, 68 million foreign visitors traveled to Spain, which was an increase of 5% over the previous year. Approximately 16 million Britons accounted for 21% of those visitors.

Following the victory for the “leave” vote in the 23 June Brexit referendum and the resulting drop in the value of the pound against the euro, there was concern in the Spanish hotel sector that the subsequent higher prices would keep Britons away.

But hoteliers noted that British travelers traditionally reserve their holidays months in advance, so there appears to be no immediate negative impact on peak business this summer.

Molas said that momentum should extend into the 2016-2017 winter season and next summer. He added that Spain’s tour operators and travel agencies that sell package vacations—which are used by 70% of British tourists when booking their Spanish holidays—have noticed steady booking trends well into 2017.

“Spain continues to be the most popular vacation spot for the British, who don’t tend to travel for leisure to some of our competitors like Egypt or Turkey, which are more popular among the Germans and French,” he said. “Spanish hotels and destinations offer the British what they want on a holiday: safety and good value for money. We’ve seen the pound-euro exchange rate fluctuate often in the past, and there was no lasting major effect on us.”

But Molas cautioned the weaker pound could curtail daily spending by British visitors in Spain and London will now be a cheaper alternative for event booking than Spanish cities.

“London is our biggest competitor in Europe for the convention trade, and Paris, where hotel prices have fallen because of the recent unfortunate events in France, is also a rival,” he said. “But our biggest competitor in all of this would be for the British to decide not to travel and just stay home.”

Long-term effects of Brexit are still unknown, said CEHAT Secretary General Ramón Estalella.

“We don’t have a crystal ball to see into the future, but there are three important unknowns to consider,” he said. “One is when Britain will finally leave the EU and what further effects that might have. Two, no one knows where the pound will be in value (in) six months or there could be a crisis in Europe dragging down the value of the euro and so making the pound stronger. And three, what might happen in our competitor countries that could affect the British source market.”

The CEHAT executives also presented the findings of a survey of its members—which include 54 local and regional hotel associations and 1.5 million beds—on the sector’s performance through the end of the summer. A majority of the respondents are looking forward to a positive high season thanks largely to a rise in room rates and longer average stays by guests, which will result in higher profits.

Molas said hoteliers are confident that the continuing demand from both Spanish and foreign guests will increase.

“What’s important now is to use the occupancy rates to maximize earnings and promote Spain through advertising and marketing so we can cement its position as one of the leading tourism destinations in the world,” Molas said.

Original story: Hotel News Now (by Benjamin Jones)

Edited by: Carmel Drake

Sabadell & Axel To Open 1st Hotel In Madrid Aimed At LGBT Community

26 October 2015 – Expansión

HI Partners, a subsidiary of Banco Sabadell, and Axel Hotels, have joined forces to open the first hotel in Madrid aimed at the LGBT community. The hotel will be located at number 49 on Calle Atocha, in a building owned by the bank that has a surface area of 5,375 m2. The financial institution will invest between €9 million and €10 million to convert the property into a 4-star hotel with 87 rooms.

The hotel chain Axel Hotels, owned by the Julià family, will sign a management contract with HI Partners, and will take care of marketing the establishment, which is expected to open in June 2017, just in time for World Pride Madrid.

The property on Calle Atocha is a historic protected building. It used to contain homes and now Sabadell, which repossessed it during the crisis, will renovate it for use as a hotel. (…).

In May, Sabadell transferred ownership of a portfolio of 22 hotels (1,600 rooms in total) located all over Spain to this company. Moreover, HI Partners manages €800 million of the bank’s hotel debt. The entity’s objective is to actively manage the properties that it has acquired through repossessions and to become one of the leading companies in the Spanish market for hotel management and investment.

The opening of Hotel Axel in Madrid is one example of the type of operations that Sabadell is launching to generate returns from its properties. HI Partners, led by Enric Rovira, is also involved in the improvement and management of hotels in its portfolio. The company is owned jointly by the bank (99%) and the management team (1%), comprising Alejandro Hernández-Puértolas, Sergio Carrascosa and Santiago Fisas. The three businessmen have extensive experience in the hotel sector, having worked for Reig Capital – the company that owns the Mandarin Hotel in Barcelona – and for companies such as MedGroup, Soros Real Estate, Stein Group and Westwing.

A desirable destination

Axel Hotels has been trying to enter the Madrid market for several years, as it sought to build on the success it has had in Barcelona, Berlin and Gran Canaria. (…). According to Juan Julià, the President of the company, Axel Madrid will be the first hotel in the capital directed specifically at the LGBT community. “There are hotels in Chueca that receive LGBT customers due to their locations, but they are gay friendly hotels; we define ourselves as hetero friendly”.

The hotel chain, which opened its first hotel in 2003, operates four establishments, with an average occupancy rate of 97%. “We operate destination hotels and have a very loyal client base”, says the owner of Axel. The company expects to generate turnover of €12.5 million in 2015, up by 20%, thanks to the opening of its second hotel in Barcelona. In the Catalan capital, the prices of Axel’s rooms range between €105 and €120; in Berlin, the average price is €90; and in Playa del Inglés, it is €70. The objective is to market Axel Madrid with average room rates of between €105 and €110, revealed Julià.

Original story: Expansión (by Sergi Saborit)

Translation: Carmel Drake