Christie & Co has released a new report analysing 14 Spanish urban destinations (Barcelona, San Sebastian, Palma, Malaga, Cadiz, Madrid, Seville, Bilbao, Valencia, Granada, Cordoba, Santander, Alicante and Santiago de Compostela) which have been selected according to their volumes of hotel demand, supply and profitability.
In 2018, the 14 studied cities together welcomed 74.3 million overnight stays, representing 21.9% of the total room nights in Spain. In addition, these cities demonstrated their strength as consolidated tourist destinations, recording demand growth levels of +2.9%, while the number of overnight stays in the country remained stable (-0.1%).
These destinations have been growing steadily since 2014, both in terms of demand and RevPAR, driven by the improvement of the economic conditions in Europe; excellent connectivity; the growth of international overnight stays; the recovery of the MICE segment and the improvements in quality of the hotel supply.
According to the report, in 2018 Barcelona remained the top urban destination in terms of RevPAR (€98.9), despite having experienced a -2.6% decrease (vs 2017), followed by San Sebastian (€97.2) and Palma (€84.9). On the other hand, San Sebastian registered the highest ADR in Spain (€134.5) and Palma achieved the highest levels of occupancy (81.0%). Cadiz ranked fourth in terms of RevPAR levels (€75.6) and Malaga fifth (€73.9), with a +5.2% increase in ADR.
After recording a +14.5% uplift in RevPAR in 2017, Madrid experienced a growth stabilization (+1.6%) in 2018, reaching €73.5. Seville, Bilbao and Valencia grew the most in terms of RevPAR, with increases of +7.2%, +12.2% and +12.1%, respectively, compared to 2017.
Despite registering declines of 2.9% and 3.0% in 2018, Santander and Alicante were positioned as the tenth and eleventh cities in terms of RevPAR, above Cordoba. Whilst the number of overnight stays decreased by -3.1%, Cordoba improved its performance with +3.4% RevPAR increase. Granada experienced a decline in profitability of -2.5%, due to a decrease of-3.3% in occupancy and, finally, Santiago de Compostela recorded the lowest levels of RevPAR (37,8€) among the selected cities.
The report offers an analysis of the markets including a review of the seasonality and the duration of the average stay in the 14 destinations, whilst reviewing their evolution in recent years. It also analyses both current and future supply in the selected urban destinations. In addition, the report includes an appendix that compares the ratio of overnight stays per available bed (O2B) in Barcelona and Madrid versus other European cities such as: Lisbon, Paris, Rome, Milan, Amsterdam and Berlin. At the same time, it offers a more detailed analysis of Barcelona and Madrid, including demand and KPIs results updated at YTD 2019 of the 14 cities covered in the report.
Joan Bagó, Market Analyst in the Hospitality Consultancy division of Christie & Co, and responsible for the report, comments “The main Spanish urban destinations continue to register growth in both demand and profitability, although at a less accelerated pace than experienced in recent years. However, these cities continue to attract new hotel projects (more than 100 projects under development) that can improve ADR levels (81.1% of these projects will be four and five stars) and meet the new demand requirements.”
Inmaculada Ranera, Managing Director of Christie & Co in Spain and Portugal, adds “Spain remains one of the main hotel investment hotspots in Europe and continues to consolidate every year despite having experienced a slowdown in the number of hotel transactions during the first half of 2019. Nevertheless, we estimate that the last quarter of this year will experience a significant increase that will lead us to close to another year of growing investment levels. Urban destinations remain on the priority list of both investors and operators, especially all those that appear in this report.”