The Hotel Property Handbook - Deloitte

Hotspots accounted for the 52% of the total visitors. ▻ Andalusia's vacational hotspot 2017 (Jan-Oct) figures registered an Average Stay of 3.8 days and 33m overnight stays. Vacational destinations are affected by a significant seasonality, with almost 80% of the hotel supply closed during low season months. ▻ During ...
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The Hotel Property Handbook Investment & Financing Keys Andalusia Snapshot

December 2017

Financial Advisory I Real Estate - Hospitality @ 2016 Deloite Financial Advisory

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Javier García-Mateo, MRICS Partner Financial Advisory ‖ Real Estate [email protected] Mob: +34 659 90 02 15

Jose María Espejo Senior Manager Financial Advisory ‖ Real Estate [email protected] Phone: +34 918 232 692

Fernando Baldellou Partner Head of Financial Advisory – Hospitality [email protected] Phone: +34 914 432 514

Leopoldo Parias

The Hotel Property Handbook Andalusia Snapshot @ 2016 Deloite Financial Advisory

Partner Financial Advisory [email protected] Mob: +34 629894186

Jordi Schoenenberger Partner Hospitality Industry Leader [email protected] Phone: +34 932 543 932 2

The Hotel Property Handbook Andalusia Snapshot

EXECUTIVE SUMMARY

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► Andalusia is one Top 5 ranked destination in Spain;

2016 was a landmark year in terms of visitors accounting for c.18m visitors, +7% growth compared 2015. 2017 (JanOct) data suggests a potential deceleration with a modest growth of 2% for the same period in 2016. Vacational Hotspots accounted for the 52% of the total visitors.

Supply & Demand

► Andalusia’s vacational hotspot 2017 (Jan-Oct) figures registered an Average Stay of 3.8 days and 33m overnight stays. Vacational destinations are affected by a significant seasonality, with almost 80% of the hotel supply closed during low season months. ► During 2017, 10 new hotels have opened with c.800 rooms, while 3 Hotels have been refurbished accounting for +1,072 rooms.

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► Andalusia’s Vacational destinations average RevPAR has grown +46% (2013-17) due to robust occupancy rate growth reaching 67% record breaking figure and ADR growth of +17%.

Market Overview Andalusia growth Key drivers

2016 vs 2017 ► Andalusian economy is expected to reach pre-crisis growth levels through mid-2018. Potential tourism deceleration could tailoff positive prospects.

► Andalusian provisional GDP growth for 2017 stands c.3% while a 2.6% growth is expected for 2018. Furthermore, Tourism GDP accounted for 13% of total GDP registering a 4% growth when compared with 2016 levels.

Tourism represented 12.5% of total Employment and achieved a 5% growth over 2016. Tourism employment amounted c.245k jobs during 2016, Malaga

► During 2017,

achieved the lions share with c.30% of the total tourism employment followed by Seville and Cadiz with 18.8% and 15.6% out of the total. @ 2016 Deloite Financial Advisory

► Andalusia’s Urban destinations average RevPAR has grown +55% (2013-17) boosted by occupancy rate growth reaching 72% and ADR upturns of +13%.

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Hotel Real Estate Investment Market

The EMEA region accounts for 27% of the total Hotel Real Estate Investment volume while Spain accounts for 12% In Spain, Hotel Investment volume increased by 27% in 2017YTD (€2,717m) and accounted for 31% of total nonresidential investment

Malaga Province registered 100% of the total Andalusian investment market figure of €320m (2017), representing a 12% share out of the total Spanish hotel investment volume. Sevilla & Malaga strong capital value (€k/room) growth of c.12.4% has been driven by the solid Tourism Strategy Plans implemented by each City Town Hall.

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Key Investment and Financing Drivers

High Liquidity for both Equity and Lending due to the improvement of KPIs throughout Spain.



Increasing financing demand for prime development projects, including refurbishment, repositioning and greenfield



Location, category, performance and hotel brand sign