Appetite amongst investors for Iberia’s hotel sector is surging, according to research from Savills. 

The agency’s Investor Sentiment Survey 2025 ranked Spain as the top destination for investors this year, with hotels emerging as a preferred asset class, up 21% compared to previous year.

Savills attributes this momentum to Spain and Portugal’s consistent outperformance of the wider Eurozone, underpinned by strong tourism, resilient hotel operations and a robust economic outlook. 

Both countries are forecast to remain among Europe’s fastest growing economies through 2026, reinforcing their appeal to institutional and cross border investors seeking long term stability and income growth.

Spain remains the world’s second most visited country, while Portugal ranks 15th, supported by growing visitor numbers from key markets such as the UK and the US. 

This is translating into strong hotel demand as Southern Europe’s average daily rates continue to rise ahead of the continental average, occupancy remains high and profitability is increasing year on year.

The region is also capturing new demand from digital nomads, with five Iberian cities ranked among Europe’s most attractive destinations for remote workers. This shift is fuelling growth in extended-stay and serviced apartment developments, further diversifying the investment landscape.

A Savills spokesperson says: “The Iberian hotel market is experiencing fantastic growth, driven by a unique convergence of macroeconomic strength, tourism resilience, and evolving investor appetite. 

“Yields have tightened slightly from their 2023 peak, reinforcing investor conviction that Iberia’s hospitality markets offer enduring value and resilience in a shifting European real estate landscape. 

“We’re seeing heightened interest not only in traditional hotel assets but also in extended-stay and serviced apartment formats, reflecting the region’s adaptability to new travel and lifestyle trends. 

“With Spain now leading investor sentiment across Europe and Portugal close behind, the outlook for hotel investment in Iberia remains exceptionally strong.”

The agency says hotels now account for up to 30% of total real estate transactions across Iberia, a notable shift as activity in retail and office assets contracts. 

Spain is Europe’s second most liquid hotel market after the UK, with 2025 dominated by single-asset resort transactions in destinations such as the Canary Islands. 

Institutional investors and owner-operators remain the most active buyers, reflecting continued confidence in the sector’s fundamentals.