Málaga has experienced tremendous growth in the number of annual visitors (+63% vs. 2010), reaching 1.4M visitors in 2019.
This increase is mainly due to the increase in urban tourism by foreign tourists, which has grown the most (117% vs. 2010) and accounts for 62% of visitors in 2019, while domestic tourism accounts for the remaining 38% (+17% vs. 2010). This is a sign of the good work and growth that is taking place in the city of Málaga in all aspects. The number of overnight stays was positively impacted by the increase in the number of travellers. The number of overnight stays in 2019 was 2.8M (+75% vs. 2010). The same applies to the increase in international overnight stays, which have risen exponentially to 1.8M in 2019 (+110% vs. 2010), while domestic overnight stays have not grown as much, standing at 0.95M (+35% vs. 2010).
Like the number of travellers, the evolution of the average stay is following the same upward trend. The average length of stay for international travellers has increased to over two days. Meanwhile, the average stay of national tourists has remained stable over time at just under two days. This trend reflects the cultural evolution that the city of Málaga has experienced, offering attractive and quality urban tourism for all visitors. The operational data and, consequently, the profitability of the city have improved with respect to 2010. The main change was in occupancy, which stabilised at around 78% (+23% vs. 2010). The growth of this variable has meant that the difference between the RevPar and the average price has decreased. The city’s RevPar stood at €78.30 (+93% vs. 2010). The increase is due mostly to the increase in ADR (+40% vs. 2010).
Evolution Overnight Stays 2010-2019
Evolution of Travellers 2010-2019
Evolution of Average Stay 2010-2019
Evolution of Transactions 2010-2019
Evolution Establishments 2010-2019
The number of hotels in the city of Málaga has increased considerably, from 92 in 2010 to 118 in 2019 (+28% vs. 2010). The increase has been smaller in recent years because, rather than the construction of new establishments, there has been a repositioning of existing ones. This has led to an improvement in the city's hotel offerings. It is expected that these repositionings will continue to take place due to the evolution of tourism and the city itself. Almost 50% of the city's hotels are 4-star category and almost 30% are 3-star category. This is because the city is growing but has not yet lured investors who will attract higher category hotel brands and establish higher ticketing by developing more 5-star hotels. The average size of the establishments is 83 rooms, with a very wide range going from 357 rooms for the largest to 11 rooms for the smallest. As is often the case, smaller hotels are managed by independent owners. The operators, the vast majority of which are major national brands, manage the hotel themselves as owners, or do so through rental, management or franchise agreements. In all, these chains account for 73% of the market. Currently, 27% of hotels are owned by independent operators who continue to manage their hotels, which are often attractive assets for investors seeking to buy and reposition them.
Hotel Establishments Scheme
Hotel Establishments Category
Málaga has evolved a lot in terms of culture and tourism,
which has made it more attractive for investors and operators who are looking to make a profit from the great moment the city is experiencing. In 2019 there were three transactions involving hotel assets or buildings with potential hotel use. As for the opening of new hotels, there were 7 new medium and small size hotels that are being operated by national brands. The future of the city is very encouraging and great expectations have been generated around it. As a result, it is expected that in the next 2-3 years 19 new projects will be inaugurated and operated by national brands.
Málaga CITY TRANSACTIONS 2017-2019
(*) Note: The opening dates of future projects are estimated, as they may vary depending on the economic situation.
COVID19
IMPACT
OPPORTUNITIES
The shutting down of borders and, therefore, the closure to international and national tourism, has led to the temporary closure of all hotel establishments
Correction in land values
Workers have been subjected to temporary layoffs (ERTEs)
Adjustment in the prices of the finished product facilitating investment
Unprecedented economic impact
Possibility of sector concentration
Medicalisation of hotels in certain areas due to a shortage of hospital beds
Emergence of new hotel formats
Uncertainty in the short and medium term
Appeal to new hotel chains
Uncertainty regarding tourism and the new form of tourism in the short and medium term
Attraction of different investor profiles
Greater impact on non-professionalised establishments or establishments not belonging to large operators
New project financing formulas
Redesign of hygiene and health protocols
JORGE ROSILLO
Hotelsjorge.rosillo@savills-aguirrenewman.es