France and Spain boast well-developed hotel sectors, with strong brand awareness and diversified offerings. In the second edition of their monthly barometer, Business Immo and STR take a closer look at two giants of European tourism, whose rivalry is expressed from Paris to Madrid, from the Côte d'Azur to the Costa del Sol.
"The 'rivalry' between France and Spain in the tourism and hospitality sector is as keen as ever, as each country seeks to assert its appeal on the international stage," says Betty Psallida, account manager at STR, adding that "although these two countries present different dynamics, they continue to thrive in an ever-changing tourism landscape."
Both countries attract millions of visitors every year: 94 million for Spain in 2024 and 100 million for France, buoyed in that year by the momentum of the Olympics. A figure that may be a little disappointing for France, but historic for its neighbor to the south. "The Spanish hotel industry has reached an exceptional milestone in 2024, driven by a significant increase in international demand, with 94 million international travellers, up 10% on 2023," points out Elvira Arjona, an account manager at STR.
Moreover, while occupancy rates in the two hotel markets were virtually identical in 2021, Spain's has grown more than its French competitor, reaching 74.6% in 2024, compared to 65.5% for France.
Analysis of average prices, however, makes France even more competitive. French hoteliers have gradually pulled ahead of their Iberian colleagues since 2021, recording average prices of €185 per night, €27 more than the levels recorded in Spain.
"The leading destinations in terms of occupancy rates are Malaga (83.9%) and Valencia (81.1%)," explains Arjona, adding that "Spain has taken advantage of this growth to increase the average daily rate (ADR) across the country, with an impressive average increase of 8.9%."
As one of the world's most popular tourist destinations, Paris unsurprisingly emerges as the most important French market, with a RevPAR of €257.19 in 2024. However, while Barcelona, at €146.46, and Madrid at €129.49, are bound to underperform the City of Light, the Spanish metropolises have no reason to be ashamed of their occupancy rates of 78% and 75.8%, respectively, compared to 75% for the French capital.
Boosted by the recent inauguration of a TGV regional metro line that will make it even more accessible, Malaga (€133.23 versus €118.31 in 2023) has also recorded a significant performance gain over the past year. "Traditionally a gateway to the seaside resorts of the Costa del Sol, Malaga now attracts affluent visitors who choose to stay and explore the city itself, resulting in a wave of luxury hotel development," points out Paula Reinoso, senior account manager at STR. This increased investment and focus on high-end tourism signifies its emergence as a luxury destination in its own right, thanks to improved infrastructure, cultural attractions and connectivity.
It's no surprise to see France and Spain end 2024 head-to-head in terms of RevPAR, or revenue per available room, with France edging out its neighbor by a hair's breadth (€120.87 versus €118.28). "France and Spain continue to compete as Europe's tourism leaders, each posting outstanding performances in the hotel sector," emphasizes Betty Psallida.
She notes that France still leads the world's destinations "with iconic destinations such as Paris and the Côte d'Azur, and relies on immersive and sustainable tourism experiences attracting visitors in search of culture and authenticity." However, she also adds that "Spain is capitalizing on its appeal for seaside tourism and lively festivals, with an increase in bookings in coastal regions and islands."
If we were to use the depth of their offerings to decide between the two rivals, the advantage would clearly go to France and its 919,081 keys, against 641,399 for its neighbor. Spain, on the other hand, boasts a more extensive development pipeline, with 43,650 keys in the pipeline, more than doubling the 19,224 keys under development in France.
"Both Spain and France can look forward to a promising future, but must be prepared to face the shared challenges of overtourism and changing markets," concludes Christina Choueifaty, a senior account manager at STR. "An effective strategy aimed at actively promoting their rich cultural heritage and attracting major events, in addition to their seaside offerings, could attract a varied clientele and, above all, encourage a more balanced distribution of demand throughout their territories. This approach would make the most of the diversity of each region's assets, and help to better manage tourist flows."