2022: Record year for hotel investment – What does 2023 hold?

During the past 2022, Spain experienced a great deal of hotel investment. A record year with more than 3,000 million euros and an increase of 3.1% compared to 2021. According to the Colliers Hotel Investment in Spain Report, 133 hotels and 17,754 rooms were sold, as well as 30 other assets.

International investors have been the major players, accumulating investments worth €2,368 million (72% of the annual total). More than a third of the investment was directed towards the five-star segment, consolidating the commitment to the luxury sector of the main hotel investors.

The average room rates of transacted hotels once again reached an all-time high of €168,800 per room (+7.0% vs. the record of 2021).

Hotel investment is supported by the holiday segment

In 2022, investment was mainly concentrated in the holiday segment, as has been the norm since 2016. Holiday investment regained its prominence in Spain and accounted for 58% of the 3,279 million earmarked for this sector last year.

Regarding the urban segment, Madrid registered a record investment of 803 million euros, its best historical record to date. Madrid has registered around 24% of national tourism investment. Of the 19 operations registered this year in the capital, 7 of them stand out for exceeding 50 million euros in volume.

Expectations for the hotel investment market in 2023

During 2020 and 2021, the hotel sector has been strongly affected by the economic crisis caused by the pandemic. In 2022 we will see a resurgence in tourism demand and with it a return of confidence in the recovery of the sector. Pre-pandemic figures have already been reached during the past year due to the rebound in prices reinforced by improvements in demand and hotel occupancy.

2023 starts with a good momentum of pipeline deals worth more than 2 billion euros. Even so, the hospitality sector is approaching 2023 with caution, as it may be affected by the current economic and geopolitical outlook.

“Until the macroeconomic situation stabilises, some investors will adopt a wait & see position in the short term. In the meantime, investors with greater liquidity and buying pressure will focus on prime assets, due to their high liquidity and lower sensitivity to uncertainty, or on obsolete assets with high Capex needs, depending on their Core or Value-added profile, respectively,” concludes Laura Hernando, Managing Director of Hotels at Colliers.

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