The figures speak for themselves. The year 2018 closed with a new record for hotel investment in Spain totaling 4,810 million euros, which is 23% higher than the investment made in 2017. The Spanish hotel sector is currently experiencing unstoppable growth, making our country the second-most popular destination for investors in Europe—trailing only the United Kingdom and even surpassing powerhouses such as France and Germany—according to data from a study conducted by the consulting firm Colliers International.
The growth trend continues in 2019, and the sector is expected to reach a historic high. So if you’re wondering where to invest, invest in hotels. There’s no better time than now to embark on a business venture in the hospitality industry—an exciting sector where every day is a challenge.
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The Hotel Industry: A Good Place for Profitable Investments
Hotel investment in Spain reached record highs in 2018, making Spain the second-largest recipient of investment funds. Most transactions have focused on the purchase of existing hotels, particularly those associated with the vacation sector.
Data from the report by the consulting firm JLL Hotels & Hospitality on the outlook for hotel investment in 2019 projects a transaction volume that is only 0.7% lower than that recorded for 2018. This stabilization in investment is to be expected, as growth as spectacular as that seen over the past two years cannot be sustained indefinitely.
However, these are still excellent and very positive figures. This year, hotel operations will continue, but at a “slower” pace, the report notes. Some of the causes cited include political uncertainty in the United Kingdom—caused by Brexit—as well as in Italy and France; the current trade tensions between China and the United States; future interest rate hikes; and lower projected economic growth. Despite this, the report predicts solid growth in hotel occupancy and the possibility of setting a new record for international travel.
Why Invest in Hotels?
The tourism sector grows every year, and it is an undeniable fact that this upward trend will continue in the years to come. Economic development in many countries around the world has fueled the growth of tourism, as many more people now have greater purchasing power, allowing them to travel to other destinations, both within their home country and abroad.
Another reason for the increased activity in the tourism sector is the shift in consumer habits. Today, many people are seeking new experiences for their vacations—or their lives, as is the case with digital nomads—to disconnect in exotic locations and engage with other cultures. Travel offers the chance to fulfill all these expectations, so more and more people are choosing to book travel packages during their vacations or to spend extended periods living and working in other countries.
Against this backdrop of tourism growth, the perfect environment for hotel investment has been created. Three trends are shaping 2019: a focus on coworking spaces (workspaces shared by different companies) within hotels, investment in high-end hotels that offer luxury and exclusivity, and, finally, growth driven by the launch of new brands.
As we mentioned above, more and more people from younger generations are choosing to live a nomadic lifestyle, working wherever they go. The so-called digital nomads are young entrepreneurs whose line of work allows them to work from anywhere in the world. A table, a laptop, and an internet connection are all the equipment they need to do their jobs. Some hotel chains have picked up on this trend and are committed to offering spaces where their guests can share experiences and knowledge while they work.
As for luxury establishments, many accommodations view the luxury hotel niche as a sound investment because it offers significant potential for growth and, furthermore, allows them to provide high-quality, personalized services to each guest.
Finally, the launch of new brands is one of the pillars of growth in the hotel industry in 2019 because they cater to the type of guest seeking added value and a unique selling point, whether in terms of services, facilities, or the hotel’s location. Today’s travelers—especially those with high purchasing power—seek exclusivity, novelty, and surprising experiences during their hotel stays.
Given these highly favorable figures for hotel investment, we at IHCS encourage you to contact us. We’d be delighted to answer your questions, help you find hotel investment opportunities, and, above all, encourage you to trust us and our expertise to help you launch your business venture in the hospitality industry.
