Iberian hotel market sees investor boom

According to a report by Savills, investor confidence in the Iberian hotel market (Spain and Portugal) is experiencing a significant boom. 

Madrid

Spain has been identified as the top investment destination for 2025, with hotels being the most favoured asset class, showing a 21% increase from the previous year.
This surge is attributed to the strong economic performance of Spain and Portugal, consistently outperforming the Eurozone due to robust tourism, stable hotel operations, and positive economic forecasts. Both countries are expected to be among Europe's fastest-growing economies until 2026, attracting investors looking for long-term stability and growth.
Spain continues to be the world's second most visited country, and Portugal ranks 15th, both benefiting from increasing tourism, particularly from the UK and the US. This translates into high hotel demand, with Southern Europe seeing rising average daily rates, high occupancy, and increasing profitability.
The region is also becoming popular with digital nomads, with five Iberian cities being top choices for remote workers. This trend is driving growth in extended-stay and serviced apartment developments, further broadening investment opportunities.
Javier Oroz, director, Hotel Capital Markets, Savills Spain, said: “The Iberian hotel market is experiencing fantastic growth, driven by a unique convergence of macroeconomic strength, tourism resilience, and evolving investor appetite. Yields have tightened slightly from their 2023 peak, reinforcing investor conviction that Iberia’s hospitality markets offer enduring value and resilience in a shifting European real estate landscape. We’re seeing heightened interest not only in traditional hotel assets but also in extended-stay and serviced apartment formats, reflecting the region’s adaptability to new travel and lifestyle trends. With Spain now leading investor sentiment across Europe and Portugal close behind, the outlook for hotel investment in Iberia remains exceptionally strong.”
Thomas Emanuel, head of Hospitality Thought Leadership, EMEA at Savills, added: “Hotels now account for up to 30% of total real estate transactions across Iberia, a notable shift as activity in retail and office assets contracts. Spain is Europe’s second most liquid hotel market after the UK, with 2025 dominated by single-asset resort transactions in destinations such as the Canary Islands. Institutional investors and owner-operators remain the most active buyers, reflecting continued confidence in the sector’s fundamentals. We look forward to seeing the market go from strength to strength through the end of this year and into 2026.”