International investors’ interest in the Iberian hotel sector is growing rapidly, according to the new Savills Investor Sentiment Survey 2025 by international real estate consultancy Savills. Spain is emerging as the top European investment destination in 2025, with hotels emerging as the most popular property category, up 21 percentage points from last year.
According to Savills, this momentum is fueled by the consistent outperformance of Spain and Portugal compared to the rest of the Eurozone. Strong tourism demand, resilient hotel operations and a positive macroeconomic environment create an attractive mix for institutional and cross-border investors seeking security and predictable returns. Both economies are expected to remain among the fastest growing in Europe through 2026, further strengthening their investment profile.
Spain remains the second most popular tourist destination in the world, while Portugal ranks 15th globally, thanks to strong demand from the UK and US markets. This picture translates into strong demand for hotels: in Southern Europe, average daily rates (ADRs) are growing faster than the European average, occupancy rates remain high and profitability – measured in GOPPAR – is strengthening year on year.
At the same time, the region is attracting a new wave of travelers: digital nomads. Five Iberian cities are now among the most attractive European locations for remote working, a trend that is accelerating the growth of the extended-stay segment and serviced apartments, broadening the range of available investment opportunities.
“The Iberian hotel market is experiencing an impressive period of growth, driven by a unique combination of macroeconomic strength, resilient tourism and evolving investment demand,” said Javier Oroz, Director, Hotel Capital Markets at Savills Spain. He noted that yields have eased slightly from their 2023 high, confirming investors’ positive belief that Iberian offers lasting value in a changing European real estate environment. “We are seeing increased interest not only in traditional hotel assets but also in extended-stay and serviced apartments, which respond to new travel and lifestyle trends,” he added.
The hotel market now accounts for up to 30% of all real estate transactions in the Iberian Peninsula, while retail and office activities are shrinking. Spain is the second most liquid hotel market in Europe after the UK, with 2025 marked by significant individual resort transactions, particularly in the Canary Islands. Institutional investors and operator-owners remain the most active buyers, confirming their confidence in the fundamentals of the sector.
“We expect the market to further strengthen its momentum through the end of the year and into 2026,” said Thomas Emanuel, Head of Hospitality Thought Leadership, EMEA at Savills, noting that interest in resort assets continues to grow, supported by solid tourism demand and improving performance.
With travel demand to Southern Europe remaining strong and Spain leading the investment vote of confidence in Europe, the outlook for hotel investment in Iberia remains extremely positive.
