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23-Feb-2010

Confidence in real estate as an investment vehicle is high this year, particularly from institutional investors.

Hotels Galore in Southern Spain

05 June 2009

Malaga province, home to the Costa del Sol and one of the current hotspots for cheap property Spain, is also a major focus for hotel development. Of the eight provinces in the region of Andalucia, Malaga has received the most applications for new hotels. The avalanche of new applications proves that hoteliers, both international and domestic, are firm believers in the Costa del Sol's potential for tourism.

Recently released statistics show that Malaga province has received a total of 76 new applications for hotels, nearly 20% of the region's total. According to Andalucia's regional Tourism Registry, this proves there is real interest in the area's tourist industry. Malaga province has the second highest number of 5-star hotels in Spain (there are currently 21, concentrated mainly in Estepona and Marbella). Several more high-profile hotels are under construction on the Costa del Sol including the Mandarin Oriental in Benahavís due to open next year.

Along with hotels, one of the largest accommodation options on the Costa del Sol are self-catering apartments, a sector currently experiencing excellent growth. According to the Costa del Sol Tourist Board, apartment stays increased by 5.6% during 2008, a tendency that is expected to continue this year because tourist figures in Marbella and surrounding resorts have been extremely promising so far.

Despite the global slowdown and the strength of the euro, Spain is still a favourite with holidaymakers. It features in Thomas Cook's Holiday Cost of Living 2009 survey as one of the world's top ten value destinations and Spain is, according to the survey published last month, still excellent value for money. Total daily expenditure on mainland Spain adds up to ₤34.66 (compared to ₤48.51 in the UK), a similar price to countries such as Tunisia, Turkey and Egypt generally perceived as ‘cheap' holiday spots. Thomas Cook describes Spain as "a fantastic value for money holiday hotspot".

With a buzzing hotel industry and growing numbers of holidaymakers choosing to stay in apartments, the Costa del Sol is undoubtedly going places. "Tourism is definitely acting as an engine behind the current big interest in property here," says James Gonzalez, Market Analyst at Obelisk Investment Property. "Not only does tourism make this one of Europe's top holiday spots, it's also a major driving force behind the renewed enthusiasm for property investment."

The Costa del Sol is currently beaming bright on investors' radars, particularly those in search of cheap property or repos in Spain. However, as James points out, a cheap property will not necessary attract holiday lets. "Spending more on a quality property will pay more in rental returns," he says, "as this is a middle to high-end destination where tourists expect a certain level of quality."

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