The Spanish resort market – Christie & Co report
The Spanish tourism industry recovered with great strength post-pandemic, with most resort destinations experiencing a surge in air traffic boosted by connectivity improvements in 2023, including new international routes.
Despite the emergence of alternative sun destinations and further development of direct competitive markets (Italy, Greece, Portugal, etc.), Spanish resorts consolidated their position as the leading sun and beach hub in Europe and the world. The decline of major tour operators led to the opening of 270 new routes, which were absorbed by traditional and low-cost airlines, enhancing air accessibility.
In 2023, Spanish resort markets bounced back to their pre-pandemic performance, with international destinations outpacing domestic ones due to the lesser economic impact of the pandemic on international markets.
However, against all expectations, Spain enjoyed a relatively strong economic performance in the wider European context, which may indicate a stronger domestic market in the future.
Demand is projected to remain robust in 2024, setting the stage for another record year with alltime high bookings for the summer season. The market is also evolving structurally with international destinations making strides in reducing seasonality, attracting visitors throughout the year. However, domestic destinations continue to experience more marked seasonality, with travel peaking during the summer months.
Despite geopolitical upheaval, rising interest rates, and inflationary pressures, the industry continues to grow, with a focus on acquisitions and expansions over new build projects due to international brands entering the market. All resort destinations, barring Costa Tropical and Costa de Castellon, have recorded a positive net room supply since 2019.
The trading outlook remains strong for 2024, with consistent RevPAR gains across all resort markets in 2023, driven by a boost in ADR performance and a nearly full recovery of the occupancy. While occupancy is expected to see a slight increase in 2024, ADR may experience a slowdown in conjunction with a reduction in inflation levels in Spain and key source markets. Investment interest in Spanish resorts is high, despite increasing competition in developing Mediterranean destinations and geopolitical turmoil.
High development costs are leading investors to focus on established trading destinations that can accommodate larger developments. Destinations like Costa de la Luz-Cadiz, Costa de Valencia and Costa Brava are emerging as hotspots for investors, with significant transactions expected in the coming year. – Nicolas Cousin
