Holiday and urban hotels: what investment in CapEx do they need?

Destinations

In the report “The recovery of the hotel sector: driving force behind the economy in Spain”, Deloitte details that the average age of the hotels is 9.5%, which “evidences the need for our hotel plant in terms of investment in CapEx for improvement and repositioning”, since an establishment is in a “healthy state” between 0 and 5 years from its opening or last reform undertaken.

“To promote the renovation of the hotel plant and its ecological transition, we consider that close to 3,000 million euros will be necessary, whose scope of action will be inclusive urban development, enhancing the sustainability of the entire tourism ecosystem and promoting the business and labor fabric that surrounds them, “they explain from the consulting firm.

Holiday hotels

In order to gain greater competitiveness and an acceleration towards the ecological transition, holiday hotels will need around 2,175 million euros until 2025 for their renovation. The category of hotel that requires the most investment varies according to the tourist area analyzed

In the Canary Islands, the average age of holiday hotels is 10 years and a few 597.5 million euros to reach a “healthy state”. In the destination, 68% of 4-star hotels should be renovated according to Deloitte, and that represents an investment of 368.9 million euros. In 5 stars, the investment in CapEX required is 140.9 million; in 5 stars of great luxury, 47.8 million; while 3-star hotels need 39.8 million.

In the case of Balearic Islands, the hotels are 8 years old and the estimated investment for the vacation is 480.5 million. 57% of four-star hotels and 35% of three-star hotels require the most money for renovations: € 265.9 million and € 144.1 million, respectively.

In the case of CataloniaTo achieve a healthy state in the holiday hotel industry, 423.1 million euros must be invested, 61% in four-star hotels.

The consultancy firm maintains that the comprehensive renovation plan initiated by the hotels must be aligned with the four pillars that support the European Union’s Recovery and Resilience Plan: ecological transition, transformation, digital, social and territorial cohesion, as well as gender equality

City hotels

Of the 3,042 million euros for renovations and repositioning, 28.5% should be allocated to renovating urban hotels and it is the 4-star category that has the highest percentage of rooms to be renovated, according to Deloitte calculations.

In Catalonia the average age of the hotel plaza is 10 years, so its renovation requires an estimated investment of 292 million. In the Community, 58% of the urban four-star hotels would need an update.

In the case of Madrid the estimated amount until 2025 exceeds 223 million euros and in the Valencian Community the figure is 92 million euros.

This means making investments focused on “decarbonization, the reduction of consumption and emissions, the incorporation of renewable energies, the implementation of digital monitoring systems and the commitment to industrialized construction systems”