Costa del Sol tops the table for investment in holiday hotels on the Spanish mainland

Despite the impact of the pandemic, transactions worth 72 million euros have been signed on the coast during the first six months of the year


Hotel investors continue to be attracted to the Costa del Sol. Despite the impact of the pandemic, the coast is the best-performing holiday destination on the Spanish mainland during the first half of the year.

This is reflected in the latest Hotel Investment report prepared by Colliers, which said the value of deals closed in Malaga province in six-months amounted to 72 million euros.

The study highlights that hotel investment in Spain has focused on the 'prime' destinations: Madrid, Barcelona, the Canary Islands, the Balearic Islands, and the Costa del Sol, which amounted to 887 million euros in the first six months of the year to June.

The report points out «the cash pressure on the chains has made them the most active sellers in the market so far this year» and highlights the recent dynamism of the market, which in just six months has exceeded the total investment volume of 2020, which was estimated at 955 million.

«The market seems to have overcome the sharp decline produced as a result of the impact of Covid-19 on the tourism sector,» says Laura Hernando, at Colliers, who said that a total of just over one-billion-euros changed hands, that involved total of 43 hotels (with 6,715 rooms), as well as another nine assets, including land for hotel development and real estate for reconversion.

The cities of Madrid and Barcelona topped the ranking. However, in the holiday sector it is both the islands and the Costa del Sol that continue to lead the field.

Hernando highlighted the strength of the Costa del Sol as one of the great attractions for investors despite the health crisis. «Although investment activity has been significantly reduced in the area as a result of the pandemic, with an investment volume of 72 million until June, operations such as the purchase - by the joint venture between Bain Capital and Stoneweg - of the H10 hotel Andalucía Plaza, demonstrate the confidence of investors for the fast recovery of one of the main tourist destinations in our country».

Hernando added, «although it is not always linked to the transactional market, it is interesting to highlight the recent commitment of renowned international operators to the area including the entry of luxury brands such as Four Seasons, W, SO by Sofitel, Conrad and the Unbound Collection by Hyatt, among others, which is expected to boost the market.»

«Between 2015 and 2020, the Costa del Sol has received a total of 1.2 billion euros in hotel investment. During this period, the bulk of the activity, specifically, 798 million, that is, 66 per cent of the total, has been directed towards the major holiday towns, while Malaga city accounted for the rest», said Hernando.

The Colliers report warns that during the first half of this year the urban segment has slightly outperformed the holiday segment, breaking the historical trend in terms of hotel investment. «However, it is possible that by the end of the year, the holiday sector will regain its traditional lead», Hernando said.