Investment: Hotels a great opportunity in Spain

Investors can find great opportunities in the hotel sector in Spain, experts agreed at Real Asset Media’s Iberian Investment Briefing, which was held online recently.

‘In the recovery phase investors need to be selective and focus on two aspects: sector where there is distress but with long-term fundamentals, and anything specific to the Spanish market that offers opportunities,’ said Cristina García-Peri, Head of Corporate Development and Strategy, Azora.

The hotel sector ticks both boxes, she said: ‘I would choose the hotel sector over all others because there will be tremendous opportunities in terms of price but also of types of assets that will come to the market’.

Spain has the largest leisure hotel stock in Europe with over 500,000 beds, she said, and the pandemic’s negative effect on the hospitality industry will last beyond 2020 into 2021. There will be distress in the sector, but tourism will bounce back as people will go back to travelling and having holidays in Spain.

The same will apply to Portugal. ‘I’m optimistic that in a year’s time we’ll be back to normal or at any rate to a new normal,’ said Pedro Coelho, Chairman, Square Asset Management. ‘Leisure tourism will return but business hotels will be badly affected, as there will be less conferences and events in the future’.

An overwhelming majority (85%) of market experts believes that there will be more opportunities in distress over the next 12-18 months in the Iberian markets, according to a snap poll conducted by Real Asset Media. 12% believe opportunities will remain the same and only 3% that there will be less.

It will not be just tourists returning to Iberia: experts believe that many Europeans, now that they have got used to working from home, will choose to re-locate to Spain or Portugal to enjoy better weather and quality of life.

‘Iberia will be stronger in the future because more people from the North of Europe will make a lifestyle choice, relocate there and do remote working,’ said Coelho.

Surveys among global investors show that they value good infrastructure, availability of skilled labour, size of the market and quality of life, said Maria Jesús Fernández, Executive Director, ICEX – Invest in Spain: ‘We think that more people who work from home will move to Spain to benefit from higher quality of life’.