Hotel investment in the Balearics made the region a focal point of Spain's hospitality property sector in 2025, according to new data from Colliers' Hotel Investment Report Spain 2025. With 18 hotel transactions finalised, the archipelago recorded the highest number of deals across Spain—surpassing the Canary Islands at 17 transactions—while attracting €472 million in capital. This places the Balearics among the country's top three most active markets.
Although the Canary Islands claimed the largest share of hotel investment by value—reaching €1.039 billion—the Balearics emerged as the leader based on deal count, underscoring a market noted for liquidity and diversity. Barcelona, meanwhile, distinguished itself in urban hospitality with €712 million invested, in contrast to Madrid's €376 million, which reflected a shrinking pool of major hotel assets available. The Balearics' performance stood out despite the absence of large portfolio transactions in the Mediterranean, and flows of hotel acquisitions signalled enduring appeal for institutional capital.
Steady transaction flow marks a standout year
The Spanish hotel sector logged an exceptional €4.275 billion of total investment, marking the second-highest annual result on record, trailing only 2018 and 2023. In all, 194 property transactions were tallied nationwide, spanning operational hotels, redevelopment projects, and plots designated for new developments.
Operational assets dominate, national buyers lead
Operational hotels accounted for the lion's share of activity, with 159 transactions comprising 22,000 rooms, and aggregating nearly €3.986 billion—an increase of 30% on the prior year. Conversions for hotel use remained significant, while land acquisitions for hotel projects brought in an additional €130 million. In the Balearics, activity was spread across several mid-sized deals, reflecting a mature hospitality landscape and sustained tourist demand.
Market dynamics and investor profile
Local investors retained a dominant role, responsible for 72% of transactions and 63% of overall investment, totalling €2.673 billion. Within this group, hotel chains took centre stage with 42 deals, amounting to a record €1.384 billion. Meanwhile, international capital contributed €1.602 billion, with prominent French funds actively acquiring assets. "Investors are not only attracted to established destinations but are carefully selecting locations within each market, considering factors such as pricing pressure, product availability, and growth potential," stated Laura Hernando, managing director of Hotels at Colliers.
Holiday segment regains the lead
The holiday hotel segment bounced back to claim 55% of investment (€2.336 billion) after a temporary dip in 2024, thanks in part to high-value deals like the €430 million sale of Resort Mare Nostrum—the largest single asset transaction in Spain during the period. While the urban hotel market recorded a greater volume of deals, the holiday segment led on total capital committed, reinforcing the draw of destinations such as the Balearics for long-term investors.
Secondary destinations and 2026 outlook
An uptrend in investment in secondary Spanish destinations was observed, capturing 32% of market activity—a sign of increasingly targeted capital allocation strategies. Entering 2026, the Spanish hotel sector benefits from robust demand, limited new supply, and improving financing conditions. The Balearics remain well-positioned as a stable and attractive market for investors looking for enduring value in tourism-led assets.