For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:   2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001

Beyond its role as Spain’s political and administrative capital, Madrid stands out as a dynamic and multifaceted economic centre. The city is home to a buoyant real estate market alongside well-established sectors spanning hospitality, commercial banking and higher education. Corporate hotel demand is largely underpinned by the cluster of company headquarters and financial institutions concentrated in the financial district to the north of the city.

Madrid has steadily cemented its reputation as a compelling short-break destination, drawing visitors through its diverse cultural offering and internationally renowned attractions. Historically characterised by a dominant corporate market and a comparatively modest leisure segment, the influx of luxury hotels in recent years speaks to an increasingly varied and sophisticated demand profile.

From 2015 to 2019, hotel occupancy in Madrid rose by 8-10%, reflecting a compound annual growth rate of 2.5%. This steady increase in occupancy, combined with an almost 30% rise in average rate, led to robust RevPAR growth of around 40% over the period. Following the pandemic, Madrid’s hospitality market demonstrated a swift and resilient recovery. By 2022, the city had regained about 85% of its 2019 occupancy levels, with average rates already returning to pre-pandemic levels in real terms, despite the sharp rate decline in 2020 and a high-inflation environment. By 2024, occupancy had fully recovered to 2019 levels, while average rate continued to climb, bolstered by two consecutive years of double-figure growth. Momentum remained in 2025, mostly driven by a strong increase in average rates, yielding real RevPAR growth of nearly 30% over 2019 highs. This strong performance is underpinned by the expansion of Madrid’s luxury segment. The addition of approximately 850 rooms under prestigious luxury and upper-upscale brands – including Four Seasons, Rosewood, Mandarin Oriental, EDITION and JW Marriott – has significantly contributed to the upward momentum in average rates.

Madrid’s hotel supply has expanded in tandem with rising demand, though at a more measured pace, contributing to the city’s strong occupancy performance. Between 2018 and 2025, room supply in Madrid grew at a compound annual rate of 1%, while demand grew slightly faster over the same period, thereby marginally increasing average occupancy levels. Looking ahead, Madrid’s hotel pipeline is set to add approximately 5,000 rooms if all projects materialise. This would be equivalent to 8% of the city’s current supply. Recent and upcoming additions include, among others, the 155-room Urban Hive Madrid, which opened in April 2026; the 64-room Soho Boutique San Blas, scheduled to open in 2027; and the 51-room Nobu Madrid, also slated for 2027.

Madrid is generally considered a relatively liquid hotel investment market. While transaction activity slowed significantly during the pandemic – as seen across many European cities – it rebounded notably in 2022, with ten hotel sales recorded that year. Momentum continued in the following years, with 11 properties transacting in 2023 and nine in 2024. Momentum remained in 2025, with eight properties transacting in the market. Among these properties, the 41-room Limehome Madrid transacted in January for an undisclosed amount; the 230-room easyHotel and the 156-room ibis budget transacted as part of a two-hotel portfolio for approximately €65 million in July, and the 194-room Silken Puerta Madrid and 90-room Silken Torre Garden transacted in September, part of a nine-hotel portfolio exclusively in Spain. The entire portfolio transacted for around €250 million.

Hotel values in Madrid rose by 4.0% in 2025, according to our 2026 European Hotel Valuation Index. This increase was largely driven by exceptional average rate growth fuelled by the surge in tourism, which helped offset rising operating costs. As a result, values per key now stand 8.0% above 2019 levels, in nominal terms.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

ADR Change
Market Demand Change
Hotel Occupancy Increase/Decrease
RevPAR Change
Market Supply Growth

Change In Value For Market: (€Euro)

Madrid RevPAR Change (€Euro)

Madrid RevPAR (€Euro)

For more information, please contact:

	Sophie Perret, MRICS, MBA Managing Director [email protected] +44 0 7725781037 (m)
	Maxime Gauthier Senior Associate [email protected] +44 0 7593572865 (m)