Why Spain Drew €4.3bn in Hotel Deals in 2025 — What Investors Should Do Next

Spain's hotel boom: concise numbers that change the conversation

Spain's hotel market has become central to any discussion about property and real estate Spain investors can no longer ignore. Two recent industry reads make that plain: a Savills investor survey and Colliers’ transaction data. Together they show that Spain attracted €4.275 billion of hotel real estate investment in 2025 across 194 transactions, a 26% increase on 2024, and the second-highest annual figure in Colliers’ historical series after 2018.

These are not vanity figures. The Savills poll of investors managing over €1 trillion of assets found that 73% of respondents keep a "buying position" for 2026 and plan to increase exposure to hotels. That level of conviction matters: it shifts capital allocation, alters pricing dynamics in core resort and city submarkets, and changes competition for deals.

What this opening means for readers

We believe this is more than a headline. For buyers, portfolio managers and family offices considering hospitality property purchases in Spain, the market now requires disciplined underwriting, operational horsepower and a clear view on seasonality and asset repositioning. For existing owners it means pricing may stay firm and buyer demand will remain strong for assets that deliver reliable cashflow.

The data: what Savills and Colliers actually report

Putting the two sources together gives a clear snapshot of 2025 and a preview for 2026:

• €4.275 billion invested in Spanish hotels in 2025 (Colliers) across 194 transactions.
• Transaction volume rose 26% compared with 2024.
• Savills’ investor survey (managers of >€1 trillion assets) found 73% of participants with a buying stance for 2026 and plans to increase hotel exposure.
• Investor demand is concentrated on luxury and upper-upscale hotels and leisure-focused resorts, while value-add strategies remain common.
• Profitability targets are stable: most investors expect annual returns of 6–8%, with target exit IRRs above 15%.

Colliers also notes that domestic capital and hotel groups expanding portfolios were major drivers of activity in 2025. Looking forward, Colliers expects the sector to remain robust in 2026 thanks to resilient tourism and restrained growth in new supply.

Why Spain is attracting so much hotel capital

There are clear, concrete reasons investors are reloading into Spanish hotels. We separate the demand-side and supply-side drivers and then add operational factors.

Demand-side drivers

• Strong tourism flow: Spain continues to draw international and domestic visitors, supporting occupancy levels across major tourist nodes.
• Favorable seasonality: Many Spanish destinations benefit from long high seasons and a well-established travel calendar, which boosts revenue-per-available-room (RevPAR) profiles for large parts of the year.

Supply-side factors

• Limited new-build pipeline in many prized submarkets means constrained competitive pressure on rates and occupancy.
• Repositioning opportunities: owners and operators can improve returns with renovation and rebranding, which suits the value-add model many investors cite.

Operational and capital structure factors

• Hotel groups and domestic capital have been aggressive buyers, seeking scale and portfolio synergies.
• Investors are looking for recurring income and a clear exit path; that combination favors assets with strong operating histories or clear repositioning plans.

Taken together, these elements make Spain attractive for institutional, private and family office capital.

What investors are buying — and what returns they expect

Savills and Colliers show that the highest investor interest in 2026 is concentrated in two asset types:

• Luxury and upper-upscale hotels — buyers favour hotels that can command premium room rates and diversify revenue streams through F&B, events and services.
• Leisure-focused resorts — beachfront and island resorts remain popular because they outperform on both occupancy and ADR (average daily rate) during extended high seasons.

Return expectations are prudent rather than speculative. According to Savills:

• Most investors expect annual yields of 6–8% from hotel investments, emphasizing predictable, recurring income.
• Target IRR on exit is above 15%, which implies a strong focus on operational improvement and value creation before disposal.

This split — steady annual yield plus ambitious exit IRR — signals that investors want cashflow today and capital appreciation on exit. That combination favours seasoned operators and assets where renovation and revenue management can unlock meaningful upside.

A practical playbook: how to approach hotel deals in Spain now

If you're active or thinking of entering the market, here are practical steps and deal points we recommend based on the current market dynamics.

1. Underwrite with scenario-based RevPAR models

• Stress-test budgets for different demand profiles (base case, soft tourist season, strong recovery).
• Price-in operational improvements and estimated CapEx for repositioning to reach the target IRR.

2. Focus on operator arrangements and brand power

• Management agreements and franchise fees materially affect net operating income. Seek favorable terms or negotiate performance-based fees.
• Where possible, tie incentives to cashflow and GOP (gross operating profit) margins rather than top-line only.

3. Value-add diligence

• Inspect deferred maintenance and regulatory restraints on change of use. Many profitable plays require full knowledge of refurbishment timelines and permitting.
• Check labour markets and seasonal staffing costs; those can swing margins in resort locations.

4. Financing strategy

• With many lenders still cautious on hospitality, secure financing terms early and consider blended debt/equity structures. Fixed-rate tranches can protect cashflow against rate shocks.

5. Exit route clarity

• Institutional and domestic hotel group interest means there are multiple buyer pools.