The Canary Islands and their luxury hotels led hotel investment nationwide in 2023

The Canary Islands and their luxury hotels led hotel investment nationwide in 2023

The Canary Islands continue to consolidate their tourism recovery. In addition to the good occupancy data in hotel and non-hotel complexes and the 14 million foreign visitors by air, there is an increase in hotel investment in the 571% compared to 2022.

In 2023, the Canary Islands were the undisputed protagonist of hotel investment nationwide, registering 39 operations for a total value of 1,175 million euros, the equivalent of 28% of the invested during the year, which in absolute numbers was 4,248 million euros.

After a very poor 2022 regarding hotel investment, in 2023 the islands once again approached the level of 2018, record year with an investment of 1,684 million. Since that year, the 650 million investment mark had not been reached, so 2023 can be considered a very positive year for the island’s tourism sector, as demonstrated by the study prepared by the real estate consultancy, Colliers.

Analyzing hotel investment by category, a particular focus on luxury hotels stands out in the archipelago. 4 and 5 star hotels accumulated a total volume of 1,064 million of euros, representing 75% and 15% of the investment, respectively. From Colliers, they point out the notable influence of the strategic participation of the Singapore International Reserve Fund (GIC) in Hotel Investment (HI) Partners. The latter has a portfolio that includes, for the most part, repositioned luxury hotels, including emblematic properties such as The Ritz-Carlton Abama Hotel in the south of Tenerife or the Hotel Secrets Bahía Real Resort & Spa in Corralejo.

4 and 5 star hotels accumulated a volume of 1,064 million, representing 75% and 15% of the investment

In addition, it is worth noting the operation of GuideBridge on the Beatriz Hoteles portfolio, which included two hotels in Costa Teguise and Puerto del Carmen; the Meliá and the Innside Fuerteventura, included in the joint project between Banca March and Meliá or the Be Live Experience La Niña acquired by Stoneweg in Costa Adeje.

Portfolio operations

As happened at the national level, portfolio operations monopolized the vast majority of the business (93%). In fact, only four individual asset transactions were closed, worth 81 million euros, including the purchase of the Aldiana Fuerteventura by DER Touristik and the final award of the Hotel Las Águilas (Tenerife) by Apollo, operated for more than a year by the operator ADH Hotels & Resorts.

Despite the challenging macroeconomic conditions of the past year and the increase in interest rates to the highest level in the last twenty years, average prices per room of the hotels transacted in the archipelagos have remained at 188,500 euros.

Foreign capital

As occurred at the national level, where international investors carried out operations for 75% of the total invested, in the Canary Islands foreign capital accounted for more than 82% of the investment, with a large weight of portfolio operations. If only Were we to consider individual asset operations, the participation of international investors would decrease to 52%giving greater prominence to investors and national hotel chains.

A record tourist season was recorded in 2023, with notable improvements in the performance of various national destinations, especially highlighting the vacation areas and cities that combine leisure and business tourism. Despite the current economic situation, short-term tourism prospects remain very positive. Consumers show a clear spending preference on travel and experiences. Furthermore, the solid performance of the winter season in the Canary Islands reinforces optimism for the new year.

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