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View of the La Zambra hotel, after the complete refurbishment of the old and iconic Byblos. SUR
Costa del Sol witnesses huge boom in hotel refurbishments

Costa del Sol witnesses huge boom in hotel refurbishments

A report estimates that 228 million euros was spent on improvements and construction in 2022, which represents 14 per cent of the total in Spain

Pilar Martínez

MALAGA.

Wednesday, 1 February 2023

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The pioneering hotel industry on the Costa del Sol leads the way in Spain for refurbishments on the mainland.

Colliers, a global leader in real estate investment advisory and management services, has highlighted the strong investment made on the coast in hotel improvements and construction during 2022.

Across Spain, Malaga province is in third place after an investment of 228 million euros last year; the Balearic Islands, invested 332 million euros last year, and the Canary Islands, 267 million euros.

The consultancy firm explains that in 2022 most of the investment in hotel refurbishment and construction in Spain was directed towards three of the five main tourist destinations. The Balearic Islands, the Canary Islands and the Costa del Sol together represent 50% of the total registered investment. The Costa del Sol accounted for 14% of all the investment made in the country, which amounted to 1.6 billion euros.

Colliers, which operates in 63 countries with more than 17,000 professional expert advisors, points to the dynamism of the holiday segment as the key to the upturn. It points out that these destinations account for 59% of global investment, after what it considers to be an "atypical" 2021, in which investment in hotel refurbishment and construction was mainly directed towards the urban segment.

Recovery in demand

In 2022, the global investment registered in Spain has been allocated to renovate or build 172 hotels and almost 26,000 rooms. Fifty-six per cent of this volume, or 927 million, was concentrated in 78 projects, totalling 7,350 rooms, which were either new builds or conversions due to change of use. "There has been a clear focus on comprehensive refurbishments over the past year. This type of project has accumulated an investment of 576 million euros, which has been used to completely renovate 46 establishments and 9,070 rooms,” Colliers said.

Laura Hernando, Managing Director of Hotels at Colliers, said that "the recovery in demand, and the record rates achieved by many establishments, have helped to strengthen investors' commitment to the Spanish tourism sector and instill confidence at a time of high economic uncertainty".

Modernisation decree

The report also includes the impact that the hotel modernisation decree approved by the Junta de Andalucía at the end of July last year has had on this boost to investment in hotel development and construction. This regulation allows for the extension of the buildable area by up to 20% in certain cases. On the Costa del Sol, around fifteen hotels will invest almost 200 million euros in the renovation of their facilities, adapting them to save energy and to the new demands from visitors.

Malaga province is at the forefront of investment in Andalucía, accounting for half of all the funds earmarked in the region, amounting to some 400 million euros.

This is also reflected in the Colliers report, which states that "it is interesting to note how four Andalusian provinces stand out. The provinces of Cadiz, Seville, Almeria and Cordoba, with around 195 million euros, have reached 12% of the total investment in renovation and construction of new hotels at a national level".

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