Hotel Sector Sees Continued Strength in Year to June

29 July 2019 – Richard D. K. Turner

According to the Hotel Sector Barometer, Madrid and Barcelona saw RevPAR growth of 15.1% and 12.7%, respectively, in the first half of 2019. The study stems from a partnership between STR, a global benchmarking, analytical and market knowledge provider, and Cushman & Wakefield Spain.Cushman & Wakefield

Continuing a trend that began at the beginning of the year, RevPar in the Canary and Balearic Islands fell by 4% and 3.6%, respectively. Brexit fears and increased competition from countries such as Turkey, Egypt, Tunisia and Israel have weighed on demand.

The average daily rate per occupied room rose by 2.8% in Marbella, 6.5% in Barcelona and by 13.2% in Madrid. Malaga, Seville and Valencia also posted ADR growth above 5%, while the ADR fell by almost 2% in the Balearic and Canary Islands. ADR grew by 5.3% for Spain as a whole.

Original Story: Hosteltur

STR & Magma HC: Hotel Investment Continues to Rise in Spain

2 August 2018 – Hosteltur

The Spanish hotel industry has increased its interest in investment due to the strong growth in yields in several markets, and despite the fact that the political scenario in Cataluña has slowed down the performance of the country as a whole. That is according to analysts from STR and Magma HC, who explain that the investment boost has been largely driven by the strength of international demand, even during the financial crisis.

“The increase in holiday tourism, as well as in ‘bleisure’ (business with leisure tourism) has opened the market to numerous development opportunities, with several operators currently working on improving their products and services to satisfy the growing demand”, says Albert Grau, founding partner at Magma HC. Thus, in his words, the Spanish hotel sector “is continuing to boom, despite the challenges ahead”.

In this sense, it is worth remembering that, between March 2015 and March 2018, Spain registered 37 consecutive months of RevPAR (revenue per available room) growth. In recent months, by contrast, there have been marginal decreases, above all due to the slow down in Barcelona, which is home to the largest number of rooms in the country. Even so, according to data from STR, in most of the key domestic markets, including in Madrid, hotel yields are continuing their strong upwards trend.

“Vacation markets, primarily Gran Canaria, have experienced YoY decreases because tourist demand has returned to rival destinations such as Turkey and Egypt”, says Javier Serrano, manager at STR for Spain.

Barcelona

STR’s study shows that, in general, hotels in the Catalan capital have managed to keep their tariffs more or less stable, although there have been more notable decreases in recent times. Following the independence referendum last October, the occupancy rate of establishments in Barcelona fell considerably. During the first half of 2018, they fell by 5.2% with respect to the same period a year earlier, whilst the ADR (average daily rate) fell by 1.4% compared to 2017.

“Although it is still too early to make any kind of prediction about what will happen in the market in the end, it is likely that Barcelona will recover quickly once the situation stabilises”, says Serrano. “Hotels in Barcelona”, he adds “saw constant monthly RevPAR growth rates in the double digits in 2016 and 2017, when the market was still benefitting from strong international demand and demand diverted from destinations such as Turkey and the north of Africa. The recent instability in Barcelona slowed down those previous growth rates, with decreases in occupancy rates driven by the decrease in domestic and international demand, mainly from the USA. Nevertheless, if the market manages to keep tariffs stable, we should see growth to the extent that consumer confidence returns to Barcelona”.

Madrid

Madrid, with the highest RevPAR growth rate in all of Spain in 2017, has benefitted over the last three years from demand due to leisure and corporate business. As well as being one of the main weekend destinations for Europeans, it has also seen an increase in interest from several Asian countries and the USA, especially when it comes to group reservations (…).

The Director-General of STR, Robin Rossman, believes that “there is enormous potential for Madrid’s hotels to continue pushing up rates”. In his opinion, “to the extent that demand continues to grow and the hotel supply market continues to evolve with the arrival of more high-end properties, we can expect to see increases in the ADR”.

Overall, the analysts at STR expect that corporate demand in Madrid will continue to increase thanks to the celebration of international events and the relocation of the headquarters of several companies from Barcelona to the Spanish capital. As such, they forecast ADR growth of close to 3% in Madrid by the end of 2018.

Original story: Hosteltur

Translation: Carmel Drake

Banco Santander Puts Hotel Koral up for Auction

6 December 2017 – Levante EMV

Banco Santander has put Hotel Koral, located on the beachfront in Oropesa del Mar, up for auction for €7 million. The establishment has 210 rooms and a swimming pool. The auction is open until 11 December.

The bank took ownership of the property as the result of a debt that it had granted to the previous owners, amounting to €2,127,677. Moreover, the property has another charge over it in the form of an unpaid loan amounting to €700,000 from Cajamar, according to sources close to the operation. The investor that offers the highest bid will acquire the property free of charges. All of the information about the bid is available on the BOE’s auction website.

The electronic auction opened on 21 November. The value of the auction is €7,082,465 and interested parties must pay a deposit of €354,123. According to information provided yesterday on the BOE’s auction website, no bid has yet been formalised for the property.

The building is located on the new promenade in the Tosalet de Oropesa area. The hotel is a ten-minute walk from the centre of Oropesa. The establishment offers 210 rooms with views of the sea or the pool, which is located in a garden area with sun beds and parasols.

The bank has put the property on the market at a time when there is a great deal of investor interest in hotels. Hotel profitability has grown by 32.5% in Valencia due to the strength of international tourism and the recovery in domestic consumption, according to a report by the consultancy firms STR and Magma Hospitality Consulting.

The growth in hotel profitability in the Community of Valencia is much higher than in Madrid (18.6 %), Málaga (15.38 %), Barcelona (14.6%), Marbella (14.5 %) or Sevilla (14.4 %). The strong performance in terms of profitability is being seen despite competition from tourist apartments, which are being marketed through online platforms such as Airbnb.

The barometer from STR and Magma HC is based on data from 145,000 rooms in more than 800 hotels located all over Spain. Data corresponding to the first half of 2017 shows a very positive trend with double-digit growth for the main indicators in key destinations and a general upward trend in terms of average revenues per available room (RevPAR) and in the average price per occupied room.

The good context for divesting has led other banks to follow the same path. Banco Sabadell has just sold its hotel manager HI Partners for €0.63 billion to the US fund Blackstone. That operation included a portfolio of fourteen hotels worth almost €0.7 billion, including the Abba Acteón in València and the Melià Villaitana in Benidorm (…).

Original story: Levante EMV (by Ramón Ferrando)

Translation: Carmel Drake

STR: Spain’s Hotels Are The Most Profitable In The World

7 November 2016 – Hosteltur

Spain’s hotel industry is one of the most profitable in the world, according to Javier Serrano, Director of STR for Spain and Portugal, who was speaking at a conference entitled “Marketing hotels in the digital age”, organised by the ITH (Technological Hotel Institute). Proof of this comes from the double digit increases in RevPar (revenue per available room) seen during the first nine months of 2016 in the main Spanish capitals, with the exception of Barcelona (+8.9%) and Marbella (+8.2%), which are already well established markets.

According to Javier Serrano, behind these significant increases we find “the strong behaviour of groups, both in the vacation and MICE (meetings, incentives, conferences and events) sectors. Certain destinations, such as Zaragoza, are really benefitting from increased demand from groups. Zaragoza saw a RevPar increase of 20.5% during the first nine months of the year, thanks to the city’s initiative to reuse its old pavilions, built for the Expo, to host these meetings”.

Another contributing factor has been a change in strategy by many of the Chinese airlines, which have increased the frequency of their flights to the Peninsula. They are attracted by the safety of Spain as a destination, given that, according to the Head of STR in Spain and Portugal “the US and Chinese markets are more sensitive to security concerns”.

Meanwhile, the two island groups (the Balearic and Canary Islands), which have seen RevPar increases of between 15% and 17% “are also benefitting from higher demand (diverted from competing destinations currently suffering from political instability) and from the recovery in domestic tourism, together with the low price of oil, which is boosting transport”.

STR’s data reveals that during the first nine months of 2016, the RevPar of Spain’s hotels increased by 13.4% to reach €82.21, driven by an increase in the ADR (average daily rate), which rose by 8.5% to €109.38, and by a rise in occupancy rates, which grew by 4.5% with respect to the same period last year – a record high, according to Serrano, of 75.7%.

The recovery of Madrid

In terms of its average occupancy rate, Madrid has managed to surpass the magic number of 70% in 2016 and now has an average occupancy of 70.4%, up by 3.4% compared to last year, according to the Director of STR, “which means that establishments in the city can now play around more with prices”. Not surprisingly, the ADR in Madrid has increased by 7.1% to €97.29 and the RevPar has also increased by 10.7% to €69.46.

In this way, the capital is recovering as a city break destination, with figures returning to their pre-crisis levels, above all in the case of low-end and mid-range hotels, which, together with the luxury segment, are seeing the most activity. In 2015, Madrid surpassed Barcelona as the primary urban destination for hotel investment, although “investors’ interest in Spain has slowed somewhat in recent months due to the absence of a stable Government. As a result, demand has increased whilst supply has remained almost stable, which has benefitted those properties already in operation. (…).

Original story: Hosteltur

Translation: Carmel Drake