For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:
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2001
Barcelona is one of Europe’s favourite short-break leisure destinations. 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 an established centre for meeting, incentive, conference and exhibition (MICE) business as well as an increasingly important port of call for cruise ships.
Tourism arrivals in Barcelona had been growing at a steady pace historically, which resulted in the city being flooded each summer by day trippers from nearby beach destinations and cruise ships. Following residents’ concerns of ‘over-tourism’ in Barcelona, 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.
Following years of strong RevPAR growth of between 5% and 10% year-on-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. The city’s performance swiftly recovered in 2019. As a result, hotel values in Barcelona increased by around 6.5% in 2019 and surpassed 2017 levels in nominal terms. The performance in 2020 contracted significantly owing to the pandemic, but the second half of 2021 saw the start of recovery. In 2022, room nights in Barcelona had recovered to around 90% of 2019 levels but, despite strong growth in average rates, the RevPAR level remained 18% below the 2019 level in real terms.
Barcelona’s current hotel pipeline includes seven projects, which are expected to bring around 1,100 rooms to the city’s hotel room supply. The 175-room Hotel Barcelona 22 (Tribute portfolio) and the 491-room luxury SLS Hotel are being constructed and are set to open in September 2023 and June 2024, respectively. The other five hotels, which include three independent hotels, an easyHotel and a MEININGER, are still in the planning phase. This is a comparatively modest pipeline in a market with high barriers to entry.
From a transactions perspective, 2022 was almost as active as the previous year as Spain’s hotel investment space remains exceptionally busy post-pandemic. The main transactions consisted of the sale of three hotel portfolios and four single assets. The portfolio transactions included the two-property (635-room) Student Hotel Portfolio, sold for €110 million; the four-property (402-room) Corum Hotel Portfolio, sold for €33 million; and the two-property (258-room) Project Picasso, sold for €79 million. The single asset transactions were the 465-room Hotel Sofia, at €230 million (or €495,000 per room); the 213-room Hotel Senator, at €25.5 million (or €120,000 per room); the 182-room Radisson Blu Barcelona, at €75 million (or €412,000 per room); and the 92-room Hotel Mimic, at €20 million (or €217,000 per room). Overall, our HVI analysis indicates a value increase of 3.2% per key in Barcelona in 2022 compared to 2021 – values per room remain 5% below the 2019 values for this market. Value recovery prospects for this market, with such strong fundamentals and high barriers to entry, remain very strong.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact
us directly.
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