Wednesday, 20 September 2023, 17:28
The Costa del Sol continues to attract the attention of hotel investors. Despite being a pioneer in this sector and being a destination where holidaymakers from all around the world can find somewhere to enjoy a break or where they satisfy their love for gastronomy, the sea, inland areas or shopping, the province of Malaga is rejuvenating itself with new hotel projects.
Confirming the pull of the area, currently there are 36 new hotel construction projects in the province that have the approval of the Tourism Delegation of the Junta de Andalucía in the permit application process. They are in different phases of the process and some of them have even recently begun to receive guests.
The new hotel projects will add more than 5,100 beds to the destination and will increase the supply by around 2,000 rooms, according to data from the Junta de Andalucía. Of them, six are pending a change of use of the properties. These are initiatives proposed in Benahavís, Rincón de la Victoria, Alfarnate and four of them in Malaga city.
To these we must add another seven comprehensive hotel renovation projects already under way. Some of them are icons of this sector in which, due to various factors, new investors or long-time owners have considered that now it is the time to take the leap and proceed with a total update of the accommodation. In this group, the case of the famous Los Monteros stands out, which at the beginning of last year was purchased by Stoneweg Hospitality and Bain Capital Credit for 47 million. The new owners opted for a radical change of the hotel, which is planned to become the flagship of the luxury brand Kimpton, one of the exclusive brands of IHG Hotels & Resorts. The new Kimpton Los Monteros will have 178 rooms and suites, four restaurants and bars and a wide range of leisure activities that include two swimming pools, a gym, tennis courts and a spa. In addition, for those visiting the hotel on business, they will have four meeting rooms, totalling more than 1,200 square metres, with the largest of them having a capacity for 350 people.
In this effort to adapt establishments to the new demands of travellers, some of the planned reforms include an expansion of the facilities or an upgrade in category. This is the case of the five-star Guadalmina, in Marbella; the Tritón, in Torremolinos, Los Monteros and the Gran Lujo Pinomar, in Marbella. Some are proposals that are promoted by the Hotel Modernisation decree approved by the Junta de Andalucía that contemplates an increase in buildable area of up to 20%.
The decree has already mobilised 200 million euros in improvement and expansion works. A figure that will increase, forecasts the Association of Hotel Entrepreneurs of the Costa del Sol (Aehcos). This employer's association has asked for the extension of the decree for three more years, beyond the planned closure date December 2024. Aehcos wants this in light of the results of the study carried out among the 346 associated businesses in the province, which highlighted that 57% are willing to undertake works to improve their facilities in the coming years if the standard remains in force for another three years. A measure that would add another 352 million euros.
Among the new projects, investors are betting on all types of accommodation, from one-star, to a growing number of guests who seek quality although not willing to pay a lot for a room in which they will only stay a few hours, up to five stars and great luxury offers. A dozen of the new hotel projects are one and two stars, compared to which there are also three five-star and 'grand luxury' projects. Two of them in Malaga city, in the Finca del Retiro and the Palacio de la Tinta hotels and another in Casares, in the Doña Julia residential development, the latter with 185 rooms. The rest of the projects are distributed between three and four star hotels.
The reveal of new projects has not dropped on the Costa del Sol even during the years of the pandemic, in which proposals to expand the hotel offer have remained between five projects in 2020 and nine in 2021, the years when restrictions on mobility still kept the sector with its foot on the brakes. Starting last year and so far this year, interest in building new complexes has increased.
The growth potential of the Costa del Sol is also confirmed in the latest report by CBRE Group, with headquarters in Dallas listed on the NYSE, which showed that 72% of the hotel investment registered in the first half of the year in Andalucía has been concentrated in the province of Malaga. This real estate consulting and services company, with more than 115,000 professionals in more than one hundred countries, pointed to the Andalusian region as the third region of Spain with the highest volume of investment in the hotel sector in the first six months of the year, totalling 161 million euros. Only Catalonia and the Balearic Islands are ahead.
And of the total investment in Andalucía in the hotel market, Malaga reached 117 million euros, well ahead of the second-placed destination, which is Seville, with seven million euros. Therefore, the Andalusian provinces concentrate 12% of the total national investment in the hotel sector.
Rosa Madrid, director of CBRE Andalucía, said that "the hotel market in the Andalusian region is in the focus of investors, with a rising luxury hotel offer and the entry of international brands." In addition, she pointed out that in Malaga and on the Costa del Sol, investors are focusing on repositioning hotels, although they are not the only areas that are generating great interest.
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