Industry Update
Opinion Article 8 November 2017

In Focus: Madrid, Spain

By Ezio Poinelli, Senior Director of HVS Southern Europe, head of HVS office in Milan and supervising HVS activities in Italy and Spain and Filippo Brivio, Analyst at HVS Milan and Paolo Buffa di Perrero, Southern Europe Associate at HVS Milan

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Ezio  PoinelliEzio Poinelli
Filippo  BrivioFilippo Brivio
Paolo Buffa di PerreroPaolo Buffa di Perrero

This market snapshot provides an overview of the recent performance of the lodging industry in Madrid, Spain, in terms of demand and supply and analyzes past and future tourism trends. In writing these articles we utilise the expertise of HVS for each market combining our in-house data and research together with published information and interviews with opinion leaders regarding each of the examined destinations.


Spain Highlights

  • Spain is the fourth-largest economy in the euro-zone. After the 2008 world's financial crisis Spain has finally recovered from the economic stagnation and since 2013 the economy has grown strongly. In 2015 the GDP has grown by 3.2%, and in 2016 INE (Spanish National Institute of Statistics) has estimated that the GDP growth remained at the same levels (3.2%). This growth is expected to continue during 2017 (+2.50%) and 2018 (2.07%).
  • On the other hand, Spain still has some major economic issues such as the public debt that has increased steadly since 2007, reaching in August 2017 the record of 100.9% of Gross Domestic Product (GDP). Another major issue is the high unemployment rate (19%), though is decreasing compared with the peak of almost 27% registered in Spain during 2013.
  • According to the World Travel and Tourism Council, the total contribution of the Travel and Tourism (T&T) economy to the GDP of Spain was €173.1 billion (16.0% of total GDP) in 2015, and is forecasted to rise by 3.5% to €179.1 billion in 2016, and to rise by 2.0% per year to reach €219.1 billion (16.2% of GDP) in 2026. The Spanish T&T economy is currently ranked 8th to its total contribution to the country's GDP amongst 184 countries. In terms of employment, the total contribution of the T&T was 16.2% of the total (2,901,500 jobs) in 2015. This is expected to rise by 2.4% in 2016 to 2,970,500 jobs and to reach 3,172,000 jobs in 2026.
  • With total tourist arrival in 2016 equal to 75,6 million, July 2017 has been recorded as the month with the highest number of arrivals in the history of Spain with a number of 10,5 million, outclassing the previous record of 10,02 million arrivals of August 2016. During the first 7 months of 2017 international arrivals increased by 11,3% compared with the same period of 2016, according to INE. The top source country is the United Kingdom (+8,7%) followed by Germans and French (respectively +9,4% and +4,3% compared with 2016). The areas that have contributed the most to this growth registered so far in 2017 are the region of Cataluña (8,6 millions visitors, +13,2% vs 2016) and Madrid region that has registered an increase of 21% vs 2016 reaching 3,3 millions of visitors in the first semester of 2017, according to INE.

City Overview

Madrid is the capital and the largest municipality of Spain. It is the most populous city in Spain, with approximately 3.2 million inhabitants, expanding to over 6.5 million over the greater metropolitan area. The Spanish capital is the third largest-city in the European Union.

Madrid is amongst the most important Spanish tourism hubs. The city's offer is especially wide. Madrid is the capital of Kingdom of Spain since over five centuries therefore it boasts an unique offer in terms of art, culture and architecture. The city offers numerous museums, the Prado and the Reina Sofia are considered amongst the most important in the world. Besides, Madrid houses the headquarters of several international company and global organizations, such as World Tourism Organizationa and the United Nations. Madrid has always been the indisputable financial capital of Spain and according to the Financial Times after the Brexit it has been identified as new possible home for the London-based institutions looking for a new headquarter in EU.

Moreover, the city is the venue of global fairs, such as FITUR, ARCO, and the Madrid Fashion Week. Indeed, a remarkable segment of the tourist arrivals are attracted for business purposes. At last, is important to mention that Madrid hosts two of the most important football clubs in the world, Real Madrid and Atletico Madrid, each year many tourists travel from all over the world to attend the games.

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Ezio Poinelli

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Filippo Brivio

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Paolo Buffa di Perrero

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