Budget hotels dominate hotel investment in Spain
Budget hotels have captured the largest investment flows. The hotel sector is undergoing a profound structural transformation, driven primarily by changes in tourism consumption habits. This shift has led to new formats and offerings tailored to the priorities of today’s travelers. At the same time, investment strategies are also evolving, presenting opportunities for investors and industry professionals interested in understanding and capitalizing on emerging trends.
In this context, low-cost hotels have attracted the largest investment flows, gaining ground over luxury hotels and reaching nearly €100 million in transactions during the first quarter of 2025. This represents 17% of the total hotel investment, which reached €564 million, according to CBRE. These figures demonstrate a change in trend within the hotel sector, where the Budget segment has, for the first time, outperformed the luxury segment, which accounts for only 14% of total investment (6% for five-star hotels and up to 8% for ultra-luxury).
Who is investing? The mindset of budget hotel investors
The low-cost revolution is an increasingly popular trend, and investors are taking note. Modern travelers have reshaped the industry landscape, positioning budget hotels as key players, thereby prompting investors to focus their strategies on this segment. This boom is driven by various factors: high profit margins, reduced cost structures, ease of adapting to crises, and high occupancy rates, making them valuable assets.
But what’s behind this trend? Tourists’ interests have shifted in recent years toward more affordable and accessible options, allowing accommodation models to diversify and broaden the range of choices for all budgets. This phenomenon is primarily driven by the flexibility, strategic locations, and optimized services that these establishments offer compared to other types of accommodation.
Beyond the coast: high-interest areas
CBRE also confirms in its Hotel Investor Intentions Survey 2025 for the second consecutive year that Spain is the most attractive destination in Europe for hotel investment. But what do investors prefer: Madrid or Barcelona? The results show that 12% of respondents see potential in less common cities like Zaragoza or Valencia, which combine lower costs with growing tourist demand.
Investment in this type of accommodation is not limited to coastal destinations or major capitals, demonstrating the potential and profitability offered by emerging destinations. According to the 2025 Municipal Tourism Contribution Atlas by Exceltur, inland areas like Ronda (Málaga) or Cangas de Onís (Asturias) also attract a large volume of visitors. In fact, Monachil (Granada) tops the national ranking, while Naut Aran (Catalonia) holds the second position. Meanwhile, coastal destinations such as Benidorm (Valencian Community), San Bartolomé de Tirajana (Canary Islands), Salou (Catalonia), and Adeje (Canary Islands) are among the most in-demand seaside locations, consolidating their status as hotel investment hotspots.
What’s next for the hotel sector? Tourism is transforming
The sector continues to solidify its position as one of the main pillars of the Spanish economy, generating noteworthy figures thanks to its contribution to GDP and its ability to attract investment. Its appeal is undeniable, having closed 2024 with a total of 93.8 million tourists, according to the National Statistics Institute (INE). This constant flow of visitors reinforces Spain’s tourism potential, attracting national and international investors year after year.
In this sense, hotel investment stands as the second most attractive real estate asset, representing nearly 30% of the capital invested in 2024, which amounted to €3.33 billion in transactions, according to the Iberia Q4 Real Estate Market Report published by MVGM. Meanwhile, CBRE indicates that real estate investment in Spain will maintain the growth levels seen in 2024, with a projected increase of 15%.
The rise of budget hotels is not a passing trend but a reflection of a profound shift in travel habits and investor strategies. The sector has successfully adapted to market demands, emphasizing functionality and efficiency. Investors, in turn, have capitalized on this trend, which continues to generate interest and profitability. It is expected that this evolution will continue to shape the future of urban and proximity tourism within the hotel investment ecosystem.
