Canary Islands Dominate Spain’s Hotel Investment
The Canary Islands continue to dominate Spain’s hotel investment landscape. During the first half of this year, the archipelago attracted 20% of all capital invested in Spain’s accommodation sector – a share that far exceeds other holiday destinations and is only surpassed by urban areas combined. This means two out of every ten euros spent on hotel development in Spain flow to the Canaries, translating to €250 million for the islands’ tourism industry in just six months.
Outpacing the Balearics
According to global property consultancy Savills, the Canaries have not only overtaken the Balearic Islands – Spain’s other major tourist region – but are widening the gap. While the Canaries captured 20% of national hotel investment, the Balearics received 17% (€38 million less). This confirms a trend highlighted by multiple reports, including Colliers’ recent analysis showing the Canaries attracted 31% more investment than the Balearics since 2023 – despite the latter’s historically stronger tourism infrastructure with 1,300 hotels versus the Canaries’ 608.
Record-Breaking Tourism Performance
The investment surge follows extraordinary tourism results. Both 2023 and 2024 have seen monthly records broken, with over 16 million visitors last year – an all-time high. Hotel profitability has grown steadily for four years, with only a brief dip in April ending 48 months of continuous growth in key metrics like ADR and RevPAR. This consistent performance makes Canarian resorts the most attractive in Spain for hospitality investors.
Global Chains Expanding Presence
Industry experts predict increased activity from international brands like Marriott, Radisson, Hyatt and Hilton, who currently have limited market share in the islands. Their expansion plans reflect confidence in the Canaries’ sustained growth potential compared to other Spanish regions. The Costa del Sol attracted just 7% of investment, while other coastal areas like Costa Brava, Costa Blanca and Valencia combined for 10%. Even Madrid (4%) and Barcelona (14%) trail the Canaries’ figures.
Historic €430 Million Deal
The market’s strength was underscored by Spring Hotels’ recent €430 million acquisition of Mare Nostrum Resort from Selenta Group (Brookfield) – Spain’s largest-ever hotel asset transaction. The deal includes three luxury properties (four- and five-star) in southern Tenerife, virtually guaranteeing the Canaries will maintain their investment leadership through 2024. Savills notes the market remains “solid” with strong operational performance, particularly in luxury segments, though average transaction values stayed below €20 million in H1 2024 with only six deals exceeding €50 million.
