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Seville is a leading tourism and hotel market in Spain, behind only Madrid and Barcelona and in line with San Sebastian and Malaga, with great potential for growth and profitability based on the recovery of post-pandemic demand and the transformation of its hotel infrastructure.

José Luis García-Hirschfeld | Director

joseluis.garciah@savills.es

Seville is one of the leading and most consolidated tourist destinations in Spain, thanks to its monuments and cultural offer and its growing leisure attractions. With almost three million tourists in 2019, it is the third urban destination only behind Madrid and Barcelona.

The average stay in Seville was around 2 nights: 2.34 in the case of foreigners (mainly leisure travellers) and 1.8 overnight stays in the case of domestic customers, with a mix of holiday and business customers, reaching a total of more than 5.8 million overnight stays in 2019.

In 2020 and 2021, the situation arising from Covid-19, as in all destinations, segments and industries, conditioned the evolution. However, Seville has demonstrated a resilience that has materialised in every window of opportunity, reaching 50% of pre-Covid volumes. The expert consensus envisages a recovery to pre-pandemic levels by the second half of 2022, assuming that the current trend can continue without new constraints.

A key factor in the development of the destination is the weight of international tourists, who will account for almost 65% of total overnight stays in 2019, with a spectacular increase from just over 700,000 travellers and 1.5 million overnight stays in 2009 to 1.6 million travellers and 3.7 million overnight stays in 2019.

Seville currently has a total of 211 tourist/hotel establishments with a total of 22,840 beds, which represents an absolute growth of just over 25% since 2009 for a demand that has more than doubled.

Evolution of demand

Operating parameters

The hotel offer in the city is mainly distributed in two areas. The first includes the assets within the boundaries of the historic centre and the second, the business zone, is mainly concentrated in Nervión and the environs of the Santa Justa high-speed train station.

Most of the supply is concentrated in the first zone, where the hotels are smaller and generally boutique hotels - 100 rooms maximum - and where the bulk of alternative accommodation is also concentrated. Hotels catering to business travellers are located in the business district, the vast majority of them managed by national hotel brands such as Meliá, Barceló and NH.

The city has 153 hotels, most of them 4-star rated (approximately 62% of the rooms, a total of 6,802) with a limited luxury offer - only 10% - and low penetration of international brands.

There are 26 projects under development that will add almost 2,000 rooms to the city, 18% more than the current supply in the city. Most of them, around 75%, will be 4-star and above, mainly managed by top national and international chains.

As an international tourist destination, Seville is in the cross-hairs of major national and international operators and investors.

Seville's hotel market, after some very good years of growth following the low point recorded in 2013, has consolidated a 33% growth to €96.5 in 2019, with an average occupancy of 80%. With RevPAR above 75 euros, it is among the top six urban destinations in Spain in terms of profitability, in line with Bilbao, Madrid and Malaga and below Barcelona and San Sebastian.

The outlook is for a return to growth, continuing to consolidate occupancy levels and with significant ADR potential. The opening of the 5-star projects will push average nightly rates (ADR) up to levels above €300 for the luxury segment versus €205 for the 5-star in 2019, and especially the Altadis hotel project will be a very important driver.

Although there have not been many transactions in the last two years, there is a lot of liquidity and significant interest in the hotel investment market in Seville, particularly in the high end segments, with investors willing to reach prices in excess of €400,000 per finished hotel room, with very tight yields, almost in line with markets such as Madrid and Barcelona.

The focus of institutional investors is on the higher categories and significant size with a leisure focus. In this regard, we expect to see operations both in the renovation of obsolete assets and the purchase of emblematic buildings for conversion into hotels.

Seville is the third-ranked urban destination in Spain, with a growing international demand and a great potential in the post-pandemic cycle based on its differential values, the repositioning of the current hotel offer and the arrival of leading international brands

Highlights

Strong pre-Covid growth: up to almost three million visitors in 2019, driven by international leisure demand, double those of 2008.
Proven resilience during the pandemic, reaching 50% of 2019 levels by 2021, supported by the domestic market.
Consensus on recovering to pre-Covid levels progressively in the second half of 2022 to consolidate growth trend in 2023.
Progressive reconversion of the hotel stock in terms of quality, repositioning the destination at a higher level, adapted to the requirements of demand.
High interest in Seville from both investors and international operators, mainly in higher categories and larger assets, both in conversion and transformation, with a scarce supply.