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Investment funds showing major interest in buying hotels on the Costa

The empty beaches last year have not discouraged investors.
The empty beaches last year have not discouraged investors. / ÑITO SALAS
  • Most of these investors are looking for four and five-star establishments in luxury tourist resorts, at prices of around 40 million euros

The pandemic has taken its toll on tourism on the Costa del Sol, pushing to the limit the resilience of well-established companies and businesses which were extremely profitable before this crisis. This combination is proving attractive for investors who - convinced that things will improve, the destination has a great future and the tourists will return - are expressing an interest in owning a hotel in the area.

There are enquiries on a daily basis, and the greatest demand is for four or five star hotels in the best locations, such as frontline to the beach, with excellent facilities which can be adapted to meet the new demands of travellers, who are expected to want more personalised attention after the Covid-19 crisis.

The president of the Costa del Sol hotel association, Aehcos, Luis Callejón Suñé, confirms that investment funds are showing a high level of interest in hotels in the province. "We're receiving requests every day from very different groups who want to know what options there are on the market. It almost feels like a persecution, it's quite overwhelming," he says. Before the pandemic, Aehcos would have considered it rare to receive three or four requests of this type a week.

Consultancy firms say some major property transactions are already well under way, including the purchase of five star hotels at a cost of around 40 million euros.

For sale

This coincides with a large number of advertisements for hotels for sale, not only in eminently tourist areas but also some in small rural villages which were already suffering from an increase in competition and have not been able to survive the crisis. The adverts include 50 or 60-room hotels in Fuengirola, Marbella and Torremolinos for prices ranging from 6.9 to 10 million euros, and others from intermediaries who say they have a list of larger hotels available in resorts along the coast.

Carlos Ramallo, director of the Ramallo Abogados law firm, which specialises in investments, says the Costa del Sol is very popular. "There is a lot of interest in the coast and Malaga city, and there are many investors from very different countries," he says. However, the traditional fixed-rent hotel model on the Costa del Sol will undoubtedly change following the pandemic, and in some cases it is not proving easy to end the contracts with former operators.

Ramallo also says that some investment funds are looking for tourist apartments with few facilities because they plan to equip them with new technology. "There is a great deal of movement in the market," he says.

Nor should the luxury property market in Malaga be forgotten, as experts say transactions worth nearly ten million euros have been completed in the past month. The climate of the Costa del Sol is a determining factor for Europeans with high spending power who, after a year of pandemic and restrictions, have decided to invest their savings in the villas of their dreams in order to enjoy life there in the future.