Despite facing a difficult year in 2020, due to the adverse effects inflicted by the COVID-19 pandemic, Christie &Co notes that the hotel sector has remained resilient and investor demand remains strong, although in this first quarter buyers are more speculative and continue to pursue well-placed opportunities in current market. The report analyses Covid 19 main impacts on the sector and its response, along with market trends, activity and the financing landscape.
The study analyses the results of our sentiment survey conducted internationally at the end of 2020. Respondents' responses confirm the impact COVID-19 has had on the hotel industry across Europe in 2020. However, this is combined with some optimism for the recovery of a sector that has always been characterized by showing resilience to adversity.
In this survey, to the question "How did Covid impact their business?", 96% of respondents in Spain and Portugal answered that their company had been affected by the pandemic, severely or significantly in almost all cases.
However, 55% of respondents in the Iberian Peninsula believe that there are business opportunities in the hotel sector in 2021, mainly due to possible growth through the purchase of assets, combined with less competition, and with investments to improve assets.
What are the expectations for the Spanish hotel market for 2021?
Vaccination programmes will be a key element in relation to recovery: if all goes to plan, recovery should start by summer 2021 but it might take four to five years to return to pre-COVID levels.
Investor interest will remain high for Spain and Portugal, with high-end, well positioned assets in resort and city markets of most interest. Asset price deductions will remain around 40% before recovery begins, with assets located in tier two or tier three cities, as well as those not located in beach front positions, continuing to suffer from the largest deductions.
Economy hotels, extended stay and tourist apartments should recover faster as they rely more on domestic demand, whilst luxury and MICE hotels might have a longer path to recovery, depending on international demand.
Inmaculada Ranera, Managing Director General at Christie & Co Spain & Portugal, declares in relation to the activity of the firm on the peninsula: “Since the beginning of the pandemic, investors have been extremely interested in acquiring hotels in Spain and Portugal, with a focus on resort and coastal businesses as well as main urban markets. There was a notable increase in our advisory and consultancy activities as a result, especially after the summer holidays, due to investors needing to fulfil their annual investment commitments.”
You can download the full report“Business Outlook: Review, Realign, Recover” aquí: https://www.christie.com/news-resources/business-outlook/2021