Market monitor: Spain at a glance

Hotel demand is on the rise, but overall business travel spending is slowing.

Spain at a glance

Hotel demand is on the rise, but overall business travel spending is slowing.

Spain’s business travel market was worth more than US$25 billion in 2017, according to BCD Travel analysis of Tourism Economics data. Domestic trips accounted for 42% of this figure, but they’re declining and are expected to fall to 38% by 2022. Outbound travel is expanding. While total corporate travel spending increased 5% annually between 2012 and 2017, spending by Spaniards traveling abroad for business increased more than 10% per year—reaching 26% of total share. Spending on business travel is forecast to expand 5% a year through 2022. International segments should grow at close to 6% annually. But domestic business spending should grow just 3% per year.

Economic environment

Economic growth and business travel spending

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  • The global financial crisis hit the Spanish economy hard, and government efforts at stimulation only added to the country’s debt. Spain’s five-year recession didn’t end until 2014. The economy peaked at 3.4% in 2015.
  • Right now, Spain is one of Europe’s fastest-growing economies; Oxford Economics forecasts growth of 2.8% in 2018.
  • But growth is expected to slow to 2.3% in 2019 and decline to 1.4% annual growth by 2022.
  • The factors weighing on the economy include lackluster job and wage growth; slowing tourism; exports threatened by rising protectionism; investor wariness about political tensions in Catalonia; and the reduced likelihood that the government will use tax revenue and interest rates to support growth.


International travel

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  • Arrivals dominate international travel to and from Spain, accounting for 83% of the 151 million trips made in 2017.
  • Demand is heavily biased towards leisure travel, with just 6% of trips made for business.
  • The U.K. is Spain’s largest inbound travel market, responsible for almost a quarter of arrivals in 2017. Germany (16%) and France (15%) are important inbound markets, too. By 2022, strong annual growth of almost 7% is expected to lift France to second place, with a 17% share.
  • International Airlines Group (IAG), the parent company of Aer Lingus, British Airways, Iberia, Vueling and Level, dominates Spain’s two biggest markets, Madrid and Barcelona.
  • Outside of these two markets, low-cost carrier Ryanair is often IAG’s largest competitor.


Hotel demand

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  • After years of crisis, Spain’s hotel sector is in recovery. Occupancy, average daily rates and revenue per available room are on the rise. Between 2012 and 2017, hotel demand increased nearly 24%.
  • Tourists’ shift away from North Africa and the Middle East has increased bookings at Spanish resorts.
  • Spanish hotel chains dominate the market; the top four operators are local. Sercotel and NH Hotels compete for the lead. Eurostar and Melia each have portfolios of around 100 hotels. But international chain Marriott is not far behind.
  • International travelers account for almost two-thirds of hotel room nights. U.K. travelers create a quarter of that demand. Travelers from Germany book 20% of hotel stays. Demand from French and Dutch travelers is on the rise.

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