Azora Prepares a Fund to Invest €1.3bn in Hotels & Hostels

30 May 2019 – El Confidencial

Azora is currently holding conversations with various investors to launch a new fund through which it hopes to invest between €1.2 billion and €1.3 billion in hotels in Spain as well as in hostels in the main tourist markets across the Mediterranean.

The company founded by Concha Osácar (pictured above) and Fernando Gumuzio expects to launch the vehicle within the next few weeks as soon as agreements have been signed with the first anchor investors.

Azora, which used to manage the Socimi Hispania, until it was sold to Blackstone last year, has been very active in the Spanish hotel market in recent months after it purchased a hotel portfolio in Benidorm and the Costa del Sol in March comprising 1,670 rooms.

The company is also expected to enter the market for nursing homes for the elderly in conjunction with another fund, with the aim of investing up to €300 million over the next few years.

Original story: El Confidencial (by E.S.)

Translation/Summary: Carmel Drake

CBRE: Hotel Investment in the Balearics Doubled in 2018 to c. €1bn

26 March 2019 – Preferente

According to data compiled by CBRE, 47 transactions were closed in the hotel market in the Balearic Islands in 2018, corresponding to a total investment volume of more than €967 million. That figure accounted for 20% of the capital invested in Spain during the year and 32 of the transactions were concentrated in Mallorca, followed by Ibiza with 11 operations and Menorca with just 4.

Most of the operations involved hotel portfolios although two individual asset sales stand out due to their high prices per room: Hospes Maricel & Spa (as part of the Hospes Portfolio) and Belmond La Residencia. Both are 5-star establishments.

Palma (de Mallorca) maintained its position as an attractive urban tourist destination, with the addition of seven new hotel establishments comprising 275 rooms during 2018 alone.

More than 10.3 million visitors travelled to the Balearic Islands during 2018, up by 2.3% YoY, breaking the record the fourth year in a row. Nevertheless, the number of overnight stays fell slightly to 59.3 million (down by 0.4% YoY). Meanwhile, the ADR of the hotels on the islands broke the €100 barrier to reach €104.10 in 2018, up by 5.5% compared to 2017. In addition, RevPAR rose by 3.5% YoY to €80.10.

Original story: Preferente (by R.P.)

Translation/Summary: Carmel Drake

The Chinese Overtake the Germans in Hotel Investments in Mallorca

21 March 2019 – El Cierre Digital

Since 2014, when a large Chinese company, Jiangsu GPRO, acquired the historical Valparaíso Palace hotel in Mallorca, interest from Chinese investors and tourists in the Balearic Island has soared.

Until then, some Chinese people had moved to live on the island but they had done so to create small businesses, above all in the Pere Grarau district, to form a small community of almost 4,500.

Since GPRO’s purchase of Valparaíso Palace, Chinese business people have been investing more in the island; the Balearic Government has been promoting different areas as backdrops for Chinese films; and now, plans are afoot for direct flights to begin between China and Palma de Mallorca with a layover in Barcelona or Valencia. The intention is to increase the holiday offering for Chinese tourists in the Balearic Islands.

Chinese companies are also interested in investing in the Par Bit technological park just north of Palma. They are committed to improving their image in the region and creating jobs.

Turespaña forecasts that by 2025, China will be the country with most tourists travelling the world, with around 220 million per year.

Original story: El Cierre Digital (by David González)

Translation/Summary: Carmel Drake

Hotels Suffer from the First Decrease in Overnight Stays since 2012

24 January 2019 – Expansión

The record number of tourists registered in 2018 has not removed the bitter taste from the mouths of Spanish hoteliers, who are starting to suffer from symptoms that the sector is worn out. In 2018, Spanish hotels recorded the first decrease in the number of overnight stays in six years. A moderate decrease, of –0.1%, according to data from INE, but one that has not been seen since 2012, when Spain was in the midst of the financial crisis.

Spain is receiving more tourists than ever, and they are increasing their spending year on year, but they are also gradually reducing their average stay, and some of the demand is opting for alternative destinations, such as Turkey, which are competing on price, which is eroding the margins of many hotels at home (…).

According to data from Exceltur, Spain lost 21 million overnight stays in 2018, due to a decrease in the average stay. The boom in low-cost airlines, amongst other factors in the sector, has favoured the democratisation of tourism. Increasingly more people are travelling, but they are doing so for shorter periods. Whilst in 2008, the average stay was 9.4 days, it is now 7.4 days.

That change can be observed most easily amongst overseas tourists, who account for 65.8% of overnight stays and who decreased the number of nights spent in Spain by -0.4%, whereas domestic tourists increased their overnight stays by +0.4%.

The change in trend is being observed primarily in the traditional beach and sun markets, and in the most important months for the sector, in the height of the summer. In the Canary Islands, the primary destination for international tourists, accounting for almost one third of all overnight stays, visits by foreigners decreased by 3.6%(…).

According to explanations provided recently by the Head of Research at Exceltur, Óscar Perelli, these decreases reflect “the recovery of competitor countries”. Hotels, especially those on the beach, are being affected by competition in terms of prices from countries such as Turkey, Egypt and Tunisia. Those markets have recovered around 12 million tourists in recent years and they are still 20% below the levels they reached before their own crises (…).

Travellers from the United Kingdom and Germany account for 46% of all of the overnight stays made by non-resident visitors, and yet, there was a -0.9% decrease last year in the case of British tourists.

As a result, many hotels are trying to compete through promotional packages and cost reduction policies, and so prices barely increased in 2018. The Index of Hotel Prices from INE reflects a 1.5% increase in hotel tariffs, barely three decimal points above inflation for the year, making it the lowest rise in prices since 2013.

In terms of tourists who increased their hotel stays by the most, those who have to travel long distances, including visitors from the US (6.1%) are also the travellers who spend the most (€113 per tourist per day, compared with €98/tourist/day for those visiting from traditional markets), and so representatives in the sector recommend focusing promotional strategies to attract tourists from those countries.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Baraka Invests €60M in the Construction of 2 Skyscrapers in Torrevieja

21 January 2019 – Idealista

Trinitario Casanova is on a roll with Baraka. Baraka Properties, the group’s arm specialising property development, has invested €60 million in the construction of two skyscrapers in Torrevieja, which will house more than 130 homes and 250 tourist apartments, according to explanations provided by the company to Idealista News.

The project is going to materialise into two 26-storey towers. Whilst the first will be dedicated to housing in its entirety, the second will be dedicated to hotel use. “Right now, the approval of the project is in the evaluation phase, although our plans are to finalise this first phase during the first quarter of the year”, explain sources at the group, “and once the project has been approved, we will request the licence”.

The land on which the two towers are going to be built is located on Avenida Doctor Gregorio Marañon, on the seafront next to the Doña Sinforosa park. “It is 200 metre from the marina, and all of the homes from the first floor up will have views of the sea. The homes from the fifth floor up will have 360º views”, say sources at Baraka Properties.

According to the company, these will be the first towers in the city, and the tallest to date. The other enclave with towers of this calibre is Benidorm. “The trend for tourists in the area is to look for more unique properties, with higher quality finishes, where they can be offered services like in an American condominium, and this plot fulfils all of those characteristics, both due to its location, and its scale/volume”, they conclude.

In total, 32,000 m2 of space is going to be built in the two towers, and by way of reference, the price per m2 of the penthouse will amount to around €7,000/m2, making it one of the most expensive developments in the area (…).

Original story: Idealista (by Custodio Pareja & P. Martínez-Almeida)

Translation: Carmel Drake

The Boom in Tourist Apartments Cools Down

3 December 2018 – Eje Prime

The boom in Airbnb and other collaborative economy platforms has removed thousands of flats from the real estate market in recent years. The high returns that owners receive from the overnight stays of tourists are behind the phenomenon, which has contributed to a decrease in the supply of rental homes available for residents and, therefore, to an increase in rental prices, especially in the large cities. Nevertheless, this phenomenon appears to have peaked.

At least that is according to the latest results from the Tourist Apartment Occupancy Survey published by Spain’s National Institute of Statistics (INE). In October, Spain had 133,567 tourist apartments registered as such in the corresponding registers of the tourism councils of each autonomous region, which represented a decrease of 6,976 units with respect to the same month in 2017.

The decrease in October is the third consecutive monthly fall and the sixth so far this year; it comes after a period of continuous increases, which started in 2015. The maximum stock of tourist apartments in recent years was recorded in July of this year, with 167,241 units, coinciding with one of the months during which this indicator rises the most. Nevertheless, in August, the number of registered apartments decreased by 3.2% YoY, before falling by 2.3% in September and by 5% in October.

The decrease in the number of establishments took place in the last year to October in the five autonomous regions with the largest supply of that type of apartment. In the Canary Islands, where 45,958 apartments were recorded in October, the YoY decrease amounted to 2.9%, with 1,350 fewer establishments.

The most marked decrease, amounting to 13.1%, was recorded in the Community of Valencia, which lost 3,662 apartments, bringing the total to 24,280. The decrease amounted to 1.2% in Andalucía (with a stock of 18,442 apartments), 10.3% in the Balearic Islands (to 17,479 apartments) and 5.6% in Cataluña (to 10,895 apartments).

On the other hand, although the general trend is a decrease, in some autonomous regions, the volume of tourist apartments is continuing to rise, with increases in the double digits in some places, such as in the case of Cantabria, with an increase of 27.6% compared to October 2017 and of 14.8% in Castilla y León.

Original story: Eje Prime 

Translation: Carmel Drake

Costa Bellver Starts Work on its 1,000-Home Macro-Project in Oropesa

10 July 2018 – Eje Prime

The starting gun has been fired on the Calabuig family’s project in Oropesa del Mar (Castellón). The Valencian businessman Eugenio Calabuig (pictured below) has requested the first building permit for the construction of the first 56 homes in the macro-project comprising 1,000 homes in total and one hotel that his company, Costa Bellver, is planning to build in the seaside town.

The first occupancy licence is being processed, as it awaits the green light from the Town Hall. In Torre Bellver, close to Les Platgetes de Bellver, the Calabuig family are looking to increase the prime residential market, according to València Plaza.

Not in vain, Costa Bellver is keen to attract a new kind of buyer with a high purchasing power. In addition to the 1,000 homes, the company is going to build a luxury hotel to accommodate the large number of tourists who visit the area during the holiday period.

Original story: Eje Prime 

Translation: Carmel Drake

INE: Foreign Visitors to Spain Rose by 6% in Q1

4 May 2018 – Eje Prime

Tourism in Spain is on a roll. During the first quarter of 2018, 13.7 million overseas visitors came to Spain, up by 6% compared to the same period in the previous year, according to data from the Statistics of Tourist Movements across Borders (Frontur), compiled by Spain’s National Institute of Statistics (INE).

By country of origin, the British were once again the most prevalent tourists in the country between January and March, with 2.9 million visitors of that nationality. They were followed by German visitors, with 1.9 million people. The number of French tourists, the third most frequent visitor group, amounted to 1.7 million people.

The Canary Islands accounted for most of the international tourist visitors to Spain during the first three months of the year, with more than 3.7 million visitors, becoming the autonomous region of choice. Meanwhile, 3.1 million foreigners arrived in Cataluña, and Andalucía was the region that completed the Top 3 most visited during the period, with 1.9 million tourists.

In March alone, the arrival of overseas visitors to the country gained momentum with an increase of 9.6% with respect to the same month last year, to 5.4 million people. This increase contrasts with the rises recorded in January and February, which amounted to 5.2% and 2.6%, respectively.

Original story: Eje Prime

Translation: Carmel Drake

Balearic Government Doubles its Tourist Eco-Tax from 1 May 2018

3 May 2018 – Expansión

Tourists enjoying their holidays on the Balearic Islands awoke on Tuesday to news that isn’t going to completely ruin their fun, but which is certainly going to affect their wallets. The tax that tourists have to pay for each overnight stay on the islands, also known as the eco-tax, had doubled overnight. That was the result of the entry into force of the new tariffs for the Balearic Island Government’s Sustainable Tourism Tax. The increase has been criticised by hoteliers on the islands, which regard it “as frankly wrong, given that any kind of extraordinary tax reduces our competitiveness”, explains María José Aguiló, Executive Vice-President of the Hotel Business Federation of Mallorca (FEHM) in statements to this newspaper.

The government team led by Francina Armengol (PSOE) announced that this new tariff would enter into force from 1 May onwards. Specifically, during the high season, which runs from 1 May until 31 October, any tourist staying in a hotel ranked 4-stars or above will have to pay an eco-tax of €4 per night, which is twice as much as they had to pay during the same period last year (€2) and €3 more than the amount charged during the low season – from 1 November until 30 April.

One of the risks related to the rise is that, with the recovery of other markets in the Mediterranean Arc, such as Egypt and Turkey, the increase in the final cost of each stay will cause tourists to flee to other more competitive destinations.

Although the news is not new – the rise was announced in September last year – it has still surprised many tourists and critics alike, including hoteliers. By mid-morning yesterday, one tourist staying in a hotel in Palma had refused to pay the tax, claiming that he had not been informed about the doubling of the tariff and expressing his doubts over the use that would be made of the funds raised. Although the problem did not go any further – the hotel decided to bear the cost of the tax on this occasion – the situation clearly raises an important issue, relating to the information that is being offered.

Sources close to the Vice-President of the Balearic Government explain that communication efforts have been carried out in the media, as well as through tour operators and trade associations. Nevertheless, hoteliers are asking for a greater push. “Some customers book their trips directly and are unaware of the news”, explains Aguiló, who said that “more specific material” needs to be provided to inform people.

On the other hand, “customers are asking us what this money is being used for”, added Aguiló, which may lead to a reluctance to pay it. For now, they propose that the Government intensifies its communication effort in source markets.

Armengol’s Government expects to raise around €120 million this year through this tax, which will also be applied to tourists who arrive on cruise ships, regardless of how long they stay for – previously, it was only applied to visitors who stayed for more than 12 hours -. The aim, explain Government sources is “to offset tourist pressure and to conserve the eco-system and heritage, so that we can all still enjoy the islands in 10 years time” (…).

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Palma de Mallorca to Ban All Tourist Apartments From July

24 April 2018 – El País

From July onwards, homeowners in Palma, on the Balearic Island of Mallorca, will not be allowed to rent out their apartments to tourists. The capital of the popular Mediterranean destination has adopted a pioneering measure, which will see the definitive prohibition of tourist flats right across the city. The local government team – a leftist alliance between the Socialist Party (PSOE), the local group Més per Mallorca and the anti-austerity Podemos – has taken this decision after commissioning several studies on the matter, which revealed that the supply of unlicensed tourist flats increased by 50% between 2015 and 2017 to reach 20,000 beds across the city. In Palma, which is Spain’s eighth-largest city by population, only 645 properties used for short-term vacation rentals have proper licenses.

The government team will approve initial holiday rental zoning plans at a meeting on Thursday, which will then be subjected to public scrutiny before being put to a final vote at a council session in July. At that point, tourists seeking this kind of accommodation will no longer be allowed to rent apartments in multi-family residential housing. Instead, they will only be able to stay in detached, single-family homes, which are being left outside the ban. Yet even these properties will be off limits if they are located on protected rural land, near the airport, or in non-residential areas such as industrial estates.

The move follows a reform of tourism legislation by the regional parliament of the Balearic Islands in August last year. That reform banned vacation rentals in apartments but left it up to local authorities to decide which neighbourhoods to apply it in. In the end, the city of Palma has decided to consider the entire municipality a “single zone” and so the ban will apply in all parts of town. The decision is meant “to protect residents,” said mayor Antoni Noguera.

Studies commissioned by city officials show that 48% of tourist apartments are offered for seven to eight months of the year, meaning they are not available for long-term residential rentals. “There is a parallel between the evolution of vacation rentals and the rise in rental prices,” said José Hila, the local chief of city planning. Rent in Palma has soared by 40% in recent years, making it the second most expensive Spanish city after Barcelona for residents who rent.

“Tourist accommodation affects the makeup of buildings and neighbourhoods, and it also affects social harmony,” said Hila. A report by the Citizen Ombudsman’s Office shows a rise in the number of complaints filed by residents due to problems with tourists who use these apartments, typically related to noise. There were 42 complaints in 2014 and 192 in 2017.

Pioneering initiative

Mayor Noguera is convinced that this measure, which is pioneering in Spain, will set the standard to be followed by other cities. “Palma is a bold and decisive city. We have agreed this on the basis of the general interest, and we believe that it will create a trend in other cities when they see that finding a balance is key.” said the mayor. “All European cities are being transformed from one day to the next by this type of offer,” said planning chief Hila.

Currently, in the Balearic capital, there is a supply of around 11,000 tourist rental beds, of which 645 have licences, all for family homes. Before the new regional legislation was approved in August, the number of beds amounted to 20,000 but the high fines established by the law – of up to €400,000 – led to the withdrawal of adverts from users of many of the large platforms (…).

Original story: El País (by Lucía Bohórquez)

Translation: Carmel Drake