Madrid’s Hotel Sector Surges Ahead of Barcelona
Madrid, May 2 – The Spanish capital, Madrid, has achieved a significant milestone in the hotel industry, for the first time overtaking Barcelona in terms of hotel occupancy and profitability, and closely approaching it in pricing. This unprecedented shift is highlighted in the latest hotel barometer by consultants Cushman & Wakefield and STR, presented on Tuesday.
This development marks a stark contrast to the situation prevalent since the Great Recession, when Barcelona consistently outperformed Madrid in prices, profits, and demand. Barcelona’s appeal as both a holiday and urban destination, coupled with its strong attraction for Asian and Middle Eastern tourism, had historically positioned it as the leader. However, seventeen years later, the recovery of travelers from these regions has not reached pre-pandemic levels, and the city is currently affected by the closure of airspace in the Persian Gulf.
Luxury Brands Drive Madrid’s Ascent
According to Luis Arsuaga, Capital Markets Hospitality Partner at Cushman & Wakefield in Spain, the primary catalyst for Madrid’s radical transformation is the arrival of prominent international luxury hotel brands. “They have performed exceptionally well in the luxury segment, with hotels like Four Seasons, Mandarin, and Rosewood now commanding rates that can reach or exceed 1,000 euros, a phenomenon not seen in Barcelona,” Arsuaga stated.
Below this ultra-luxury tier, other hotel chains are also making significant contributions. Marriott, for instance, leads the ranking of five-star assets with seven properties in central Madrid, including The Palace, a Luxury Collection Hotel, Santo Mauro, Madrid Edition, and JW Marriott, along with El Autor, Círculo Gran Vía, and Palacio del Retiro, all under the Autograph Collection brand. These establishments typically feature prices no lower than 500 euros per day.
Further reinforcing Madrid’s luxury offerings, three other hotel companies each operate three five-star properties: Meliá (Madrid Princesa, Gran Fénix, and Palacio de los Duques), Minor (Palacio de Tepa, Paseo del Prado, and Madrid Suecia, all under the NH Collection brand), and Hyatt (Centric, Regency, and Thompson). Mar de Miguel, Vice President of the Madrid Hotel Business Association (AEHM), noted, “From a marginal presence of five-star assets before the pandemic, Madrid is projected to reach 54 by the end of 2027, considering all ongoing constructions.”
Changing Tourist Profile and Shopping Tourism
The expansion of luxury accommodations has reshaped the profile of tourists choosing Madrid, with a notable increase in visitors from the United States and Latin America. These travelers typically possess higher purchasing power than traditional European markets. This shift enabled Madrid to surpass Barcelona in 2025 as Spain’s leading shopping tourism destination.
Ainara Andueza, General Director of Global Blue, a prominent tax-free management company with an 80% market share in Spain, emphasized, “Madrid now accounts for 47% of shopping tourist spending, outperforming Barcelona by seven percentage points. It has significantly benefited from Barajas Airport serving as the gateway for the Latin American market.” Non-EU tourists can reclaim 21% of the VAT on their purchases in Spain.
Barcelona’s Hotel Moratorium: A Limiting Factor
Conversely, Barcelona’s performance has been hampered by a hotel moratorium in effect since 2015. This regulation restricts companies (chains, funds, or managers) from opening new hotels in the city center unless they are established within existing structures. This policy effectively limits the construction of new-build properties to the city’s periphery.
Bruno Hallé, Managing Partner of Hospitality in Spain at Cushman & Wakefield, explained, “This limitation has deterred many major brands, as neither the available assets nor the locations in the center aligned with their projects.” The only significant five-star operation in Barcelona in 2023 involved the transformation of the iconic Hotel Sofía into a Grand Hyatt hotel, following a 20-million-euro renovation.
The contrasting strategies and market dynamics have led to a significant reordering of the hotel landscape in Spain, with Madrid emerging as the new frontrunner in the luxury segment.
