Hotel investment slows down on the Costa del Sol

After years of focusing on the Costa del Sol, investors have shifted their focus to other destinations in Spain. According to the latest report of consultancy firm Colliers, hotel investment in the province of Malaga has dropped to 30 million euros in the first half of 2025. Interestingly, this positioning of a usually popular destination for investors at the rear coincides with a national growth rate of 20% in hotel investment. In the same period, the total investment in Spain has reached almost 1.8 billion euros - the third highest on record for the first half of the year.

Against this backdrop, Colliers considers that "there has been limited activity" on the Costa del Sol, highlighting the sale of the AluaSoul Torremolinos - a 243-room four-star hotel - to French company Sofidy. The study underlines Malaga province's loss of pull for hotel investors to the point that the upturn in investment in other cities such as Valencia, Cadiz and Seville is gaining relevance.

This slowdown is the continuation of a trend that was first highlighted last year, when the Costa del Sol lost ground by closing with a drop of 53% compared to the previous year. Among the most important operations that took place on the coast in 2024 were the purchase of the Palacio de Solecio de Activum by business owner Felipe Peraire for 51 million; the acquisition of the Vincci Málaga by Catalonia from HI Partners for 70 million; and BlueSea's acquisition of the Royal Costa in Torremolinos, alongside the former Royal Al-Andalus hotel, which has since been integrated into its operational portfolio.

Until 2024, the Costa del Sol had been one of the main centres of attention for hotel investors in Spain. Suffice to say that 560 million euros were invested in the province by funds and groups in 2023. The operations closed at that time placed the Costa del Sol as the third destination for hotel investment on the Peninsula, after Madrid and Barcelona. Since 2018, the province of Malaga had been consolidating its interest in the sector, attracting some 1.9 billion euros in a total of 82 hotel transactions and around 12,000 rooms.

Back to this year, while Colliers forecasts that Spain will profit 2 billion euros in investments in the second half of 2025, Malaga province will continue lagging behind. While Spain remains "one of the most active and flexible destinations in Europe and globally", there is a discrepancy in growth when we compare rates to those observed on the Costa del Sol.

Colliers' report determines that hotels will lead real estate investment in the first half of 2025, with the Canary Islands headlining with 648 million euros in hotel transactions, i.e. 37% of the national total, due to the leading role played by the largest single transaction in the history of the Spanish hotel industry: the sale of the Mare Nostrum Resort for 430 million.

In addition, the study shows that the holiday segment has regained leadership over the urban segment, with 63% of the total volume. Since 2017, the hotel segment has only been surpassed by the urban one in 2024. In addition, there has been a change in the profile of investors, with national investors taking over the leading role in transaction activity, allocating 1.2 billion euros to hotel assets and achieving a share of 64%.