Europe -  Barcelona

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Barcelona has established itself as a favourite short-break leisure destination in line with cities such as Paris, London and Amsterdam. It has a wealth of cultural attractions, including a well-preserved medieval centre, and a reputation for being a centre of modern and avant-garde art. The city boasts a vast cultural heritage of Catalan architect Antoni Gaudí, as well as other notable Catalan artists such as Joan Miró and Salvador Dalí. Barcelona is also an important banking and financial centre, and its transport links and proximity to France have helped to attract considerable foreign investment. In addition, Barcelona is a growing centre for meeting, incentive, conference and exhibition (MICE) business as well as becoming an increasingly important port of call for cruise ships.

Tourism arrivals have been growing at a steady pace over the last few years (a 6.0% increase in visitation in 2019), but tourism might soon face a cap as Barcelona is flooded each summer by day trippers from nearby beach destinations and cruise ships.

Following residents’ concerns of ‘over-tourism’ in the city, in July 2015 the mayor placed a moratorium on approving new hotel developments and short-term rentals. In March 2017, the moratorium was substituted with the Special Tourist Accommodation Plan (PEUAT), which was approved by Full Council on 27 January 2017. Because the 2017 PEUAT was declared null in 2019 by various rulings of Catalonia’s Superior Court of Justice, a new PEUAT was approved by Full Council on 23 December 2021 and came into force on 26 January 2022. The PEUAT regulates the introduction of tourist accommodation establishments, as well as youth hostels, tourist apartments and shared homes, limiting the new hotel supply entering the market.

From 2009 until 2017, RevPAR in Barcelona increased at an average rate of around 5.0%, powered by increases in both occupancy and average rate. RevPAR changes in 2015 and 2016 were especially significant, at around 10.0% each year. The civil unrest and demonstrations that followed the 1 October 2017 Catalan Independence Referendum had a direct impact on tourism and resulted in performance declines for 2018. After several months of stability, the city’s performance recovered in 2019, with increases in both occupancy and average rate. As a result, hotel values in Barcelona increased by around 6.5% in 2019 and surpassed 2017 levels in nominal terms. Performance in 2020 contracted significantly due to the pandemic. The second half of 2021 saw the start of recovery, leading to an increase in performance compared to the previous year. However, the overall performance in 2021 was still significantly below 2019 levels, with RevPAR being less than 30.0% of that achieved in 2019.

Barcelona is one of the most successful European short-break destinations and, post-pandemic, the city is likely to stay as such, regardless of the political and governmental changes that may lie ahead. In addition, given the aforementioned PEUAT, the pipeline in Barcelona’s city centre remains limited, with only one hotel expected to open in 2022, the 50-room One Shot Arago 257.

From a transactions perspective, 2021 was an exceptionally active year for the city: Brookfield acquired a portfolio of four properties from Selenta Group for €440 million, which included two hotels in Barcelona: the 465-room Hotel Sofia and the 435-room Hotel Expo. Multiple individual properties transacted in 2021, including the 116-room Hotel Alexandra Barcelona, Curio Collection by Hilton for €32 million (€278,000 per room), the 314-room Hotel Barcelona Apolo for €96 million (€306,000 per room) and the 156-room Hesperia Barcelona Presidente for €125 million (€801,000 per room). Additionally, various operators sold properties through sale and lease- or manage-back operations. Examples include H10 Hotels’ sale of the 95-room H10 Itaca for €20 million (€211,000 per room), LaSalle Investment Management’s acquisition of the 255-room Gran Hotel Calderon from NH Hotels for €126 million (€492,000 per room), Unico Hoteles’ sale of the 147-room Gran Hotel Central for €93 million (€633,000 per room) and the acquisition by Swiss Life AM of the 101-room Axel Hotel Barcelona from Axel Hoteles for €30 million (€297,000 per room). Overall, our HVI analysis indicates a value increase of 6.0% per key in Barcelona in 2021 compared to 2020.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
Senior Director
[email protected]
  • +44 20 7878 7722 (w)
  • +44 0 7725781037 (m)
Nikola Miljković
Associate
[email protected]
  • +44 0 2078787724 (w)
  • +44 0 7593572865 (m)