Spain Hotels & Chains Report 2021

A very warm welcome to this latest country edition of the Hotels & Chains report which a provides a snapshot of a fascinating moment in hospitality. Will we see the direction of the industry change forever?

When we wrote the last edition, we had no idea that global events would cause such chaos in a market which had seen unprecedented success in 2019. Needless to say the events of the last 20 months have thrown the ownership and performance of the hotel industry into sharp focus, exacerbating friction between owners and operators, putting pressure on lenders, making development debt something of a mirage and laying waste to the best laid plans of many giants in the industry.

Spain remains attractive for both domestic and international hotel chains. This appeal is being reinforced as a consequence of the pandemic as well-established investors and chains continue to absorb independent hotel owners and chains looking for a way to extend the useful economic lives of their properties and improve the strength of their balance sheets.

Key Points

• Hotel Chain Statistics Drop
  For the first time in recent years, overall data related to the level of hotel chain presence in the country have seen a decline, but not dramatically so, remaining between 2018 and 2019 levels. Chain penetration has been maintained stable in-line with previous years at around 35% by number of hotels and 58% by number of total keys. The number of total brands has increased by approx. 17% compared to 2019 levels mainly driven by the arrival of international brands such as Four Seasons, Hard Rock, Ikos and Anantara, leading to a better-positioned and more diversified hotel offer in both urban and resort locations.
• Hotel Chain Brands Accelerate
  The number of total brands has increased by approx. 17% compared to 2019 levels mainly driven by the arrival of international brands such as Four Seasons, Hard Rock, Ikos and Anantara, leading to a better-positioned and more diversified hotel offer in both urban and resort locations.
• Market Leaders Consolidate Positions
  In terms of room count, there are no big surprises, with Meliá Hotels Int., Eurostars Hotel Company and Barceló Hotel Group leading the ranking of domestic chains, and Marriott Int. and Accor Hotels leading the international segment. The appearance of Apple Leisure Group is a notable change, now holding fourth position with almost 10,000 rooms, after including in their management portfolio the hotels that were operated previously under the Gema Hoteles brand and four Hesperia branded hotels following their exit from management by NH. Hyatt’s agreement to acquire Apple Leisure Group (ALG) with the transaction anticipated to close by the end of this year will certainly redraw the overall picture of those chains with greater presence in Spain.
• Hotel Investment on Standby
  Hotel investment plummeted 61% in 2020 compared to the previous year.  The value of assets transacted reached €960M (with 4* and 5* hotels being the most favoured, accounting for 67% of total transactions). In the first semester of 2021, hotel investment was approx. €1,094M, exceeding the total figure for 2020. Industry experts expect transactional activity to increase in Q4, particularly in urban destinations which have been hit hardest by the pandemic.

To read this report in Spanish, please see here