Report

Madrid: Tourism and Hotel Market Analysis

2018 was a record-breaking year for tourism in Spain, with over 82 million tourists visiting the country. Madrid alone welcomed 10.2 million tourists, an 8% increase from 2017. This growth trend continued into 2019, with international arrivals rising by 18.1% and national arrivals increasing by 2.6% from January to July.

Madrid is more than ever capturing the interest of international hotel investors. The hotel supply pipeline – including many international Upper Upscale and Luxury hotel brands – will significantly change the city’s landscape and tourism appeal.

For some hotel groups, these projects will be their first hotel in Spain’s capital city, a presence that is clearly of great importance in one of the largest cities in Europe. The capital’s hotel market is in good shape and it looks like there will be room for further improvement.

Tourism and Market Performance

Overnight Stays: Grew by 11% year-on-year in 2018, with international overnight stays (61%) outpacing national stays (39%). The higher average length of stay (ALS) by foreign tourists contributed to this trend.

Key Performance Indicators (KPI):

Occupancy Rate: Increased consistently from 67% in 2014 to 76% in 2018.

ADR (Average Daily Rate): Rose from €75 in 2014 to €90 in 2018.

RevPAR (Revenue Per Available Room): Grew from €50 in 2014 to €70 in 2018.

Recent Openings and Future Supply
From 2018 to mid-2019, Madrid saw the opening of 30 hotels, adding 1,088 rooms. The majority of these were refurbishments (24), with the remainder being new-builds or conversions (6). The luxury and upper-upscale segments experienced the most significant growth, driven by the increasing number of international tourists with high purchasing power.

Notable Openings (2018-2019)

RIU Plaza España: 585 rooms, upscale.

Pestana CR7 Madrid: 168 rooms, upper-upscale.

BLESS Hotel Madrid: 111 rooms, luxury.

Pipeline (2019-2022):

INDIGO Madrid Princesa: 100 rooms, upper-upscale.

Four Seasons Canalejas: 200 rooms, luxury.

EDITION Hotel Madrid: 200 rooms, luxury.

Market Trends
Madrid’s hotel market is seeing a shift towards more upscale properties, reflecting both the increased purchasing power of Spanish nationals and the demand for high-end experiences from international visitors.

New Concepts:

Rooftop Terraces: Increasingly popular, with hotels like RIU Plaza España and NH Casa Suecia offering impressive rooftop experiences.

Unique Selling Points: Hotels are focusing on creating unique guest experiences, such as the bowling alley at BLESS Madrid and the wine room at Pestana Plaza Mayor.

Key Projects

Madrid Nuevo Norte: A major expansion project set to develop the northern district of Madrid, including residential areas, parks, and a new Central Business District. Construction is expected to start in 2021, with an estimated 240,000 jobs created.

Madrid-Barajas International Airport: AENA plans to invest €2 billion to expand the airport’s capacity from 70 million to 80 million passengers.
Aeropuerto Madrid Sur: A new airport project aimed at capturing low-cost carrier traffic, expected to start construction in 2020 and operational by 2023.