Spain tops European hotel investment rankings, reports Savills

Spain has emerged as the leading destination for European hotel investors, according to a Savills survey of investors managing real estate assets worth over €1 trillion.

Specifically, 73% of those surveyed maintain a “buying position” for 2026 and expect to “continue increasing their exposure to the hotel sector.”

From a regional perspective, Southern Europe is solidifying its position as the preferred area for investors, with Spain at the forefront, followed by Italy and Portugal. This trend is supported by strong demand drivers, favourable seasonality, and limited new supply, in a market where profitability is increasingly important.

Hotels in Spain were the most active asset type in 2025, with transactions exceeding €4.2 billion – up 26% from 2024 – led largely by domestic capital and acquisitions by hotel chains expanding their portfolios.

Looking ahead to 2026, the survey shows that luxury and upper-upscale hotels, as well as leisure-focused resorts, are generating the greatest investor interest, while the value-add strategy continues to guide investment decisions.

According to the consultancy, profitability expectations have remained stable over the past year. Most respondents anticipate annual returns of between 6% and 8%, placing strong emphasis on recurring income and targeting IRRs above 15% upon exit. In this context, a long-term approach is increasingly relevant, with many investors opting to maintain their positions throughout the market cycle.

Sustained and rising investment

The appeal of Spain’s domestic hotel market continues to grow. In 2025, it recorded the second-highest investment volume in Colliers’ historical series, surpassed only by 2018.

According to the consultancy, Spain’s hotel sector attracted €4.275 billion in real estate investment last year, across 194 transactions including operating hotels, properties designated for hotel conversion, and land for new developments.

Looking to 2026, Colliers predicts the sector will remain robust, supported by strong tourism demand and restrained supply growth, with Spain set to play an increasingly prominent role on the international hotel investment radar.

Investor profiles are expected to diversify further, with domestic hotel groups and family offices taking a larger role alongside institutional investors, sovereign wealth funds and vehicles targeting retail investors.