The Canary Islands and the Balearic Islands continue to rank among the most attractive destinations for leisure hotel investment in Europe. In recent years, both archipelagos have consolidated a model supported by very strong tourism demand, a structurally constrained supply, and levels of operational profitability that continue to attract both domestic and international capital. According to Colliers, the two markets jointly attracted more than €8.1 billion in hotel investment between 2019 and 2025, of which nearly €7 billion was concentrated between 2021 and 2025.
A New Investment Cycle Focused More on Value Than Volume
According to Colliers, the hotel market in the Canary Islands and the Balearic Islands is entering a new phase characterized by recurring capital flows, greater investment selectivity, and an increasing focus on value creation. Unlike previous cycles, which were more closely linked to expanding supply, investor interest is now shifting toward asset repositioning, improvements in hotel quality, and the optimization of operational performance.
The report also highlights that RevPAR (Revenue per Available Room)—one of the most widely used indicators to measure a hotel’s revenue-generating capacity—is currently at record highs, and this operational strength is one of the key factors explaining the continued flow of investment into both destinations.
This shift is also supported by a tourism supply base with very limited growth. In the Canary Islands, hotel capacity declined by 1.2% in 2025, while the Balearic Islands reached record levels of available accommodation capacity, albeit with growth of just 0.6%, the most moderate increase of the last five years. Colliers also notes that recent regulatory developments in both archipelagos reinforce the structurally constrained nature of supply and encourage a model based more on asset rotation and repositioning than on growth through volume expansion.
Tourism Demand Remains Extremely Strong
One of the main drivers behind investor interest is the resilience of tourism demand. In 2025, the Canary Islands recorded 72.8 million overnight stays, broadly in line with the record figures of the previous year, with 87% generated by international visitors. Colliers identifies the Canary Islands as Spain’s leading destination in terms of overnight stays.
Meanwhile, the Balearic Islands reached 63.6 million overnight stays, representing a 0.9% increase compared with 2024. International demand remained dominant, accounting for 92% of the total, in line with pre-pandemic levels.
Beyond sheer volume, both archipelagos continue to demonstrate their ability to attract higher-value tourism, a particularly important factor from an investment perspective.
Tourist Spending Reinforces the Shift in the Model
Tourist spending is another key element supporting the attractiveness of both hotel markets. Between 2021 and 2025, the Canary Islands and the Balearic Islands generated more than €173 billion in cumulative tourism expenditure.
In the Canary Islands, total tourism spending reached €24.4 billion in 2025, representing a 6.8% increase compared with the previous year, while average daily visitor spending stood at €191 per person.
In the Balearic Islands, total tourism expenditure reached €21.06 billion, up 5.2% year-on-year, while average daily spending climbed to €214, significantly above the Spanish national average.
These figures reinforce the gradual transformation of the tourism model: less focused on increasing visitor numbers and more focused on capturing greater value per visitor. For investors, this translates into stronger revenue-generating capacity and a more solid foundation for sustaining operational profitability.
A Market That Continues to Attract Capital
The fundamentals highlighted by Colliers suggest that the Canary Islands and the Balearic Islands will continue to play a highly relevant role within the European leisure hotel market. The combination of established demand, limited supply, and strong operational performance continues to create a particularly favorable environment for investment.
In addition, the growing professionalization of the sector, ongoing asset repositioning strategies, and the interest shown by international operators and brands further strengthen the profile of both archipelagos as priority destinations for long-term investment strategies.
In a more uncertain European environment, the Canary Islands and the Balearic Islands continue to benefit from clear structural advantages that help explain why they keep attracting billions of euros in hotel investment.
Quality Rather Than Volume
More than a story of growth through volume, the Canary Islands and the Balearic Islands today represent a hotel market increasingly driven by quality, repositioning, and operational profitability. This combination—very strong international demand, constrained supply, and a growing ability to generate higher revenue per visitor—is what underpins their appeal to investors.
In this context, both archipelagos are not only two of Europe’s leading tourism destinations; they are also reinforcing their position as two of the continent’s most important leisure hotel investment markets.
