The extended-stay segment in Europe is undergoing a transformation, none more so than in Spain, where a perfect storm of market opportunity and regulatory pressure is reshaping urban hospitality.
Yet, despite their significant presence in Spain’s hotel market, major U.S. hospitality groups remain notably absent from this fast-expanding segment.
Surge in tourist apartments
Tourist apartments, driven by platforms such as Airbnb and Booking.com, have become increasingly prominent across Europe. In Spain, the region’s largest tourism market, there are over 546,400 tourist apartment listings — according to AirDNA — compared to approximately 900,000 hotel rooms, according to data from INE.
While roughly 85% of hotel rooms are operated by independent owners, nearly 100% of tourist apartments are under private individuals’ management. This presents a massive opportunity for market consolidation, particularly by professional operators and established hospitality brands.
Moreover, in many of Spain’s top destinations, the volume of tourist apartment inventory now rivals or exceeds that of hotels. According to Exceltur, in cities such as Málaga, Valencia, Seville, Alicante, Granada, Córdoba, Las Palmas, Santander, Gijón and Murcia, apartment supply surpasses hotel room count. Yet U.S. hotel groups, with significant presence in Spain with conventional hotel products, remain entirely unrepresented in this alternative-accommodation class — one that happens to consistently outperform in terms of GOP margins and labor efficiency.
Tourist apartments: Scapegoats in the overtourism debate
Simultaneously, tourist apartments are at the center of a growing public policy battle. As overtourism becomes a politically charged issue, Spanish city councils and regional governments, notably lacking professionalized regulatory frameworks, have positioned tourist apartments as the perfect scapegoat.
Municipalities across the country are now debating bans, moratoria or strict licensing caps on tourist apartments. These regulatory threats, while challenging for fragmented individual owners, will in fact favor professionalized extended-stay operators capable of navigating compliance and maintaining high operating standards, while managing entire multi-unit assets.
A market seized by new players
This dual dynamic of a booming demand, paired with a growing regulatory scrutiny, has created a tipping point for a new class of extended-stay accommodations operators with more proactive business models and with private equity backing.
Brands such as Limehome, Numa Stays, Bob W, Libere and Smart Rental — mostly created around 2018 — have rapidly expanded in Spain and other European markets. To compensate for their limited brand equity, these operators leverage the labor-light, high-margin economics of extended-stay formats to offer more attractive lease terms to property owners, often up to 40% of revenue, as opposed to the usual 25% typically offered by traditional operators. This strategy is helping them win competitive RFPs across Europe’s top urban centers:
- Limehome operates in over 70 Spanish locations.
- Numa manages 13 Spanish properties.
- Spanish groups Libere and Smart Rental are active in a dozen destinations.
- Helsinki-based Bob W currently manages two locations in Spain.
In contrast, Marriott International, despite being the most established U.S. player in Europe’s extended-stay space, has a smaller regional footprint than German companies Limehome and Numa. In Spain, as of today, the only U.S. active player is IHG Hotels & Resorts, which opened a Staybridge Suites hotel in Málaga just a few months ago. On the other hand, Marriott launched Apartments by Marriott Bonvoy in June with a property to open in 2027.
Notably absent from this race are flagship extended-stay brands such as Homewood Suites by Hilton, Residence Inn by Marriott, Hyatt House, or Wyndham Hotels & Resorts brands Hawthorn Suites or ECHO Suites.
What’s next?
As the second-largest tourism market in the world, Spain represents a critical gap in the European extended-stay strategies of U.S. hotel groups. With newer competitors growing at pace and securing prime urban inventory, the window for entry is narrowing.
The question now is whether U.S. giants such as Hilton, Marriott, Wyndham, and Hyatt Hotels Corp. will pursue organic expansion or opt to acquire these rising operators to bridge this seven-year lead. The fact that most of these emerging players are private-equity-backed only adds momentum to the likelihood of mergers-and-acquisitions activity.
One thing is clear: The extended-stay opportunity in Spain is no longer emerging; it’s already here.
Ivar Yuste is a Partner with Spanish hospitality consulting firm PHG Hotels & Resorts and is a Vice President with The International Society of Hospitality Consultants.
This column is part of ISHC Global Insights, a partnership between CoStar News and the International Society of Hospitality Consultants.
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