As the capital of Spain, Madrid holds a prominent position as a cultural, economic and political hub in Europe.

Its rich history, vibrant arts scene, world-renowned culinary offerings as well as its many corporate head offices and financial institutions attract a diverse range of visitors, including both leisure travellers and business professionals.

Additionally, Madrid's strategic location within Spain and its well-connected transportation infrastructure, including its international airport and high-speed rail services, facilitate easy access for both domestic and international travellers.

The city's tourism sector, which was heavily impacted by the COVID-19 pandemic, experienced a gradual recovery from the latter half of 2021, buoyed by successful vaccination campaigns and the easing of travel restrictions both domestically and internationally.

Sources: European Cities Tourism, INE, Airports Council International, AENA

Economic Indicators – Spain

Source: IMF

Tourism Demand

The total number of visitors to Madrid recorded a healthy compound annual growth rate (CAGR) of 2.7% from 2013 to 2023. While the share of domestic and international visitors was relatively equal in 2013, domestic demand started to stagnate thereafter, as international demand went from strength to strength, mainly driven by the USA, Italy, France and the UK.

The COVID-19 pandemic significantly impacted the tourism industry with severe international travel restrictions. Domestic visitation started to recover in 2021 and, with the eventual easing of travel restrictions, international visitation progressively recovered and reached 97% of 2019 levels in 2023, leading to total visitation in 2023 being almost as high as the record levels of 2019.

The number of bednights followed the same trend as visitation figures, with more than 20 million bednights recorded in 2023. As significant events generated demand in 2024, such as Taylor Swift's only Spanish show and the World Rugby Sevens Series Grand Final, the city is expected to maintain this momentum with the Spanish Formula 1 Grand Prix starting from the 2026 season and other sporting events expected at the newly renovated Bernabeu Stadium ensuring quite a positive outlook for the hospitality industry.

International Visitation Leads the Recovery

Source: INE

Hotel Performance

With the noticeable rise in international visitation from 2017, occupancy levels in Madrid increased from the mid-60s to the low 70s, while average rate recorded a 5.2% CAGR between 2015 and 2019.

Hotel performances were heavily impacted by the pandemic in 2020 and 2021, and they started to return to normal from Q2 2022 onwards, with rates seemingly growing with inflation.

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