Tourism in Spain 2021: return to 2019 levels and growth in real estate investment

Analysis of Hospitality Brands entering the luxury resort sector in Spain

Idyllic beach on the Andalusian coast in Spain (Getty Images)

Tourism remains afloat in 2023 after a successful 2022, when the tourism sector recovered strongly from the COVID crisis.

In April, 7.2 million international tourists visited Spain, up 18.5% on the same month in 2022 and exceeding 2019 levels for the first time. The number of visitors to Spain increased by 32.4% to 21 million in the first four months of 2023, despite the slowdown in the global economy.

The UK is the top source country for tourists with more than 3.9 million visitors, marking a 31% increase on last year. France ranks second with nearly 2.8 million tourists and an increase of 29.8%, while Germany ranks third with nearly 2.7 million tourists and an increase of 17.7%.

The United States stands out as the country with the highest increase in visitors, with a 75.4% increase from last year. The number of tourists choosing hotel accommodation rose by 28% and those staying in rented accommodation by 57% compared to last year. The number of tourists visiting and staying in their own accommodation increased by 28%. The growth in tourism is driving demand for real estate and creating opportunities in the Spanish real estate market in the hotel and residential segment.

Madrid, Barcelona and major tourist destinations such as the Balearic Islands are attracting the most investment, especially in the luxury segment.

The Mandarin Oriental Hotel Group announced this year that it will operate a new beach resort on the island of Mallorca in Spain, the first resort in Europe under the Mandarin Oriental brand.

The Banyan Tree Group has signed a memorandum of understanding with La Quinta Real Estate Group on the possibility of opening the Angsana Real de la Quinta Benahavis Marbella resort and residences in 2026. Located in the Mediterranean town of Benahavis near Marbella, the project will include a hotel, branded residences, apartments and commercial spaces. This will mark the group's debut in Spain.

Although macroeconomic uncertainty and high financing costs are slowing the pace of institutional investment, interest in the Spanish market remains high.

In April, a joint venture between AXA IM Alts on behalf of its clients and Blasson Property Investments acquired the 5-star Hotel Sofia in Barcelona from Selenta Group, Brookfield's Spanish hospitality platform. AXA IM Alts is planning a repositioning program, after which the hotel will be managed by Hyatt International.

Spain continues to be one of the preferred destinations for international travelers with growing visitor numbers. It is therefore not surprising that investors are maintaining their confidence in the Spanish hospitality real estate market.