In 2025, Madrid and Barcelona have officially entered the global Top 5 most attractive cities for hospitality investment. According to the latest report by CBRE and STR, Spain’s two largest cities have surpassed global destinations like Dubai, London, and New York in terms of transaction volume, yield, and investment momentum in the hotel sector. This marks a turning point for the Spanish market, highlighting its resilience, appeal, and strategic importance on the international investment map.
Investment Growth in 2025
According to CBRE’s H1 2025 data, total investment in the hospitality sector in Madrid and Barcelona exceeded €2.1 billion, a rise of 18% compared to the same period in 2024. This growth is attributed to:
- The strong rebound in tourism after the pandemic;
- Market stability and transparent regulations;
- High yield performance (RevPAR and ADR).
RevPAR (Revenue per Available Room) reached €96 in Madrid and €112 in Barcelona, placing them among the top-performing hotel markets in Europe. Average hotel occupancy in 2025 stood at 74% in Madrid and 81% in Barcelona — both exceeding the European average.
Why Madrid and Barcelona?
1. Stable Tourism Demand
Both cities have proven their strength as magnets for both leisure and business tourism. Barcelona hosts major international events such as Mobile World Congress, while Madrid continues to rise as a financial and administrative hub for Southern Europe.
Comment
Javier Martínez, Managing Partner at Capital Hospitality Spain:
“At a time when investors are looking for stable and profitable assets, Madrid and Barcelona offer a rare mix — consistent demand, rising values, and long-term capital appreciation.”
2. International Brand Expansion
In 2025, global hotel operators such as Hilton, Accor, and Mandarin Oriental announced new developments in both capitals. A standout project is the launch of Rosewood Barcelona, a luxury hotel with 150 rooms located in a former bank building in the Eixample district. Investment in the project is estimated at €180 million.
3. Government Support and Incentives
The regional governments of Catalonia and Madrid have introduced new measures to attract hotel investors and operators. These include:
- Streamlined licensing procedures;
- Tax incentives for sustainable-certified properties;
- Investment in transportation infrastructure (including airport and metro upgrades).
Comparison with Other Leading Cities
According to STR’s global rankings, the Top 5 hospitality investment destinations in H1 2025 are:
| Rank | City | Investment (H1 2025) | Average ADR (€) | Occupancy (%) |
|---|---|---|---|---|
| 1 | Paris | €2.6 billion | €238 | 79% |
| 2 | Barcelona | €1.1 billion | €174 | 81% |
| 3 | Madrid | €1.0 billion | €161 | 74% |
| 4 | London | €925 million | €207 | 70% |
| 5 | Milan | €820 million | €192 | 68% |
This is the first time that two Spanish cities have simultaneously ranked in the global Top 5, even overtaking London in deal volume.
New Concepts and Market Trends
Madrid and Barcelona are also becoming testbeds for innovative hospitality models:
- Hybrid hotels (blending short stays with co-working spaces) are gaining popularity among digital nomads;
- Boutique hotels with local identity are attracting investors focused on uniqueness and sustainability;
- Redevelopment of historic buildings into hotels is booming, combining heritage preservation with high-end demand.
Insight
Laura Romero, Analyst at CBRE Hotels Spain:
“Barcelona’s hotel market is mature but dynamic. Investors today value not just location but concept and ESG compliance. The future lies in experience-driven and sustainable hospitality.”
Challenges to Watch
Despite the optimistic outlook, some challenges remain:
- Short-term rental regulation: Barcelona maintains restrictions on new licenses, which boosts hotel demand but limits accommodation variety;
- Rising land and asset prices: making new projects harder to access for mid-size investors;
- Political risks: with potential changes in urban or investment policies depending on elections.
Still, most analysts agree that the long-term trajectory remains strong due to solid domestic demand, reliable tourism flows, and growth in business travel and events.
Recent Key Transactions
- Invesco Real Estate acquired a 120-room 4-star hotel in central Madrid for €96 million;
- Azora Capital completed a €210 million portfolio deal for three hotels in Barcelona;
- Allianz Real Estate announced a joint venture with a Spanish developer for a €300 million hotel and serviced apartment project in Madrid.
Conclusion: Spain Strengthens Its Position as a Global Hospitality Giant
Madrid and Barcelona have shown they are not only tourism powerhouses but also profitable and secure destinations for international capital. In a highly competitive global market, their combination of pro-investment policies, strong profitability, and unique cultural identity make them standout players on the hospitality investment map.
By the end of 2025, industry experts expect at least another €1.5 billion in hotel-related deals across both cities — including new entrants from the Middle East and Asia. Spain continues to reinforce its position as one of the most stable and promising destinations in the global hospitality landscape.
