This was one of the conclusions from Cushman & Wakefield’s latest study, which compiled the sentiments of a total of 50 Portuguese and Spanish hotel groups. It should be noted that, together, the respondents represent a 200.000 room hotel offer.
In Spain, around 60% of these groups considered that the hotel market in Barcelona will require 2 years to recover to pre-crisis levels. That is also the vision of 48% of the respondents concerning the Madrid hotel market.
Prospects are similar for Portugal, with half of the respondents considering that the Lisbon hotel market will only fully recover in 2023. Nevertheless, there were those who forecasted a more optimistic scenario for the Portuguese capital and 27% considered that the segment’s full recovery in Lisbon will take place in 2022, something that can be explained by the fact that Lisbon was one of the destinations which registered «a more positive evolution in 2019», explained the consultant.
Another result from this study named Hotel Operator Beat showed that «prospects for recovery vary significantly amongst the several destinations within the Iberian Peninsula». Hotel groups believe that beach destinations (coast and islands) should recover faster than cities.
New transactions on the table
Despite the difficulties the hotel segment is currently undergoing due to the restrictions imposed by the pandemic, its good performance in the years before the crisis (between 2012 and 2019) is taken into consideration by the market’s players.
That is the reason why Gonçalo Garcia, in charge of Hospitality at Cushman & Wakefield for Portugal, assumed that «the Iberian Peninsula continues to attract the interest from investors and operators». And he further explained that this fact along with a «relatively quick» full recovery, should lead the market players who have liquidity to expect «new and good opportunities, as soon as the market restarts», he revealed in a release.
The results from the study showed that around 29% of hotel groups continue analysing purchase and sales operations in almost every market within Iberia and are also interested in analysing new projects.
The study further showed that the Madrid, Barcelona and Mallorca hotel markets are considered the most attractive in Spain, with scores, respectively, of 8.5, 7.7 and 7.3 on a scale of 1 to 10. In Portugal Lisbon (7.8), Porto (6.5) and the Algarve (6.1) were the areas that stood out.
Strategic plans remain the same
Even faced with the current situation, almost half of hotel chains maintain the strategic plans they had before the pandemic. For Gonçalo Garcia, in charge of Hospitality at Cushman & Wakefield for Portugal, «these numbers show the strength and level of responsibility of the hotel segment. Under this crisis, the segment was, despite the setbacks, stronger than during the previous crisis and as such, the strategic plans are, in part, moving forward», he assumed.
However, 21% of respondents recognised that new projects are on stand-by. Financing and changes to the market are pointed out as the main causes. On this point, Gonçalo Garcia commented that «despite the crisis, hotel groups have shown a great responsibility and willingness to pursue new projects, with both operators and owners adapting to the new reality».