Spain’s Hotel Market 2026: Record Demand, Record Prices…

A market that still looks strong — but is no longer simple

Spain enters 2026 with a hotel market that, on the surface, remains one of the strongest in Europe. International arrivals are close to record levels, pricing has reached historic highs, and operating indicators continue to outperform many peer destinations. Yet the internal mechanics of the market have shifted. Spain’s hotel sector is no longer driven primarily by demand growth. It is driven by the interaction between price, perceived value, and substitution.

The key question for 2026 is not whether tourists will continue to come to Spain. They will. The real question is how much they are willing to pay for hotels relative to alternatives, and how quickly demand reallocates when pricing outruns value.

Market position after 2025: demand strength meets structural limits

According to Spain’s National Statistics Institute (INE), hotel overnight stays reached 366.7 million in 2025, marking an all-time high. National occupancy levels, based on STR and Cushman & Wakefield data, stood at approximately 75.5%, placing Spain among the most intensively utilized hotel markets in Europe.

At the same time, Spain welcomed approximately 96.8 million international tourists, while total tourism spending reached €134.7 billion, reinforcing the country’s role as a core global leisure destination. However, from a structural perspective, occupancy above 75% already implies near-saturation at the national level. At this point in the cycle, further growth cannot be driven meaningfully by volume. The market transitions from expansion to optimization.

2025 as a statistical high-water mark

The year 2025 marked a clear inflection point. Hotel overnight stays reached 366.7 million, the highest level ever recorded in Spain. National occupancy climbed to roughly 75.5%, a level that places the country among the most intensively utilized hotel markets in Europe.

At this level, the market enters a structurally constrained phase. While individual destinations can still experience seasonal spikes, the national system has limited remaining capacity to grow through volume alone. Growth becomes increasingly difficult to achieve without relying on pricing. This dynamic is visible in the recent evolution of occupancy.

According to RealOne’s interpretation, the chart does not indicate weakness. It indicates maturity. Occupancy continues to rise, but at a slowing pace as it approaches a ceiling. From this point forward, the hotel market cannot rely on filling more rooms. It must rely on monetizing demand more efficiently.

Strong tourism fundamentals, changing internal structure

Spain’s tourism fundamentals remain exceptionally strong. Nearly 97 million international visitors traveled to the country in 2025, and tourism spending exceeded 134 billion euros. Tourism continues to represent more than twelve percent of GDP and employment, confirming Spain’s position as a core global leisure destination.

However, aggregate tourism growth increasingly masks a change in how demand is distributed. Hotels remain central, but they are no longer the automatic recipient of incremental demand. Travellers are increasingly flexible in how they choose to stay, especially as price differentials widen.

The quiet rise of substitution

One of the most important structural developments of recent years has been the rapid growth of non-hotel accommodation. In 2025, while hotel overnight stays increased by roughly one percent, tourist apartments grew by nearly six percent, and rural accommodation and camping reached record utilisation levels.

From RealOne’s analytical perspective, this divergence reflects substitution rather than demand destruction. As hotel prices increased, marginal demand did not disappear. It shifted. Longer stays, families, domestic travellers, and increasingly international leisure tourists began to weigh alternatives more actively. The redistribution of demand growth is clear when viewed across accommodation types.

Hotels continue to benefit from strong absolute demand, but they capture a shrinking share of incremental growth. This increases price sensitivity, particularly outside peak periods.

Pricing power reaches its limits

By the end of 2025, Spanish hotels were operating at historically high price levels. Average daily rates reached record territory, and RevPAR continued to rise. In the short term, this reflected genuine pricing power supported by strong inbound demand and limited immediate capacity.

In the medium term, pricing power becomes conditional. As RealOne’s analysts note, when occupancy is already high, revenue growth becomes heavily dependent on ADR. As ADR rises, elasticity becomes the central risk variable.

The first signs of resistance typically appear in urban midscale segments, in domestic-demand-heavy destinations, and in markets where alternative accommodation supply is deep and improving in quality. This pricing-led revenue structure is expected to define 2026. Revenue growth increasingly follows price rather than volume. This configuration is sustainable only as long as perceived value keeps pace with pricing. Where it does not, substitution accelerates.

The 2026 outlook: normalisation rather than acceleration

Industry expectations for 2026 point to continued growth, but at a more measured pace. Tourism GDP, sector revenues, and profitability are all expected to rise, with leisure-oriented coastal destinations clearly outperforming urban markets. Major hotel operators have already signaled further rate increases, particularly in resort locations, but within mid-single-digit ranges.

According to data compiled by RealOne, hotel overnight stays in 2026 are expected to grow by approximately 0.5% to 1.5%, while national occupancy is likely to remain within the 75% to 76% range. Average daily rates are projected to increase by 3% to 6%, with RevPAR growth broadly aligned within the same corridor.

Growth persists, but it is uneven, and performance dispersion across segments and locations is expected to widen.

Geography, supply, and competitive pressure

Geography will play an increasingly decisive role in 2026. Premium leisure destinations such as the Canary Islands, the Balearics, and the Costa del Sol are likely to sustain stronger pricing power due to their reliance on international leisure demand and lower short-term substitutability.

Urban midscale markets face a more complex environment. Business travel normalization, growing alternative accommodation supply, and new hotel openings increase competitive pressure. Where new supply enters already saturated micro-markets, competition intensifies even if national indicators remain positive. From RealOne’s point of view, operational excellence, product quality, and positioning will matter more than macro tailwinds in these locations.

The strategic meaning of 2026

In RealOne’s assessment, 2026 should be viewed as a transition year rather than a turning point. The Spanish hotel market is not heading into a downturn, but it is entering a phase where pricing discipline becomes critical.

Hotels that reinvest in product, service quality, and experience will continue to convert pricing power into sustainable revenue growth. Hotels that rely primarily on market-wide rate inflation will face increasing resistance, softer shoulder seasons, and growing substitution into non-hotel formats.

Spain remains one of the most attractive tourism markets globally. Demand remains strong, resilient, and diversified. Yet the competitive landscape has changed. Spain is not running out of tourists. It is running out of unquestioned pricing power.