Million-euro investment in Costa del Sol hotels

The Costa del Sol hotel sector is seeing new investment thanks to the good results in recent years. More than 600 million euros will be spent on hotel improvement and the launch of new projects, some of which are already about to open. This does not include the Four Seasons hotel complex in Marbella, a luxury project by business owner Ricardo Arranz, worth 650 million euros. The project combines hotel, residential use and villas, a beach club and flagship restaurants.

To highlight this strong private spending it is sufficient to point out that the investment planned by the provincial authority for next year is 96 million and that the budget that the regional government of Andalucía has allocated to the province amounts to 737 million.

Deputy president of the hotels association of the Costa del Sol (Aehcos) Javier Hernández says that what is happening in the province is a repositioning of the offer – most of the investments go beyond an improvement of the services and interior design to undertake actions that allow them to appeal to other market segments such as conventions, beauty or sports tourism. To this, he adds the strength of the brand, which acts as a magnet for the arrival of large international firms.

According to Hernández, Malaga province is experiencing “a dynamism that has not been seen in recent years. Investment is above 5% of what hotel activity generates in revenue. This is a very important figure. In other words, the sector earns between 5.5 and 6 billion euros. Allocating 10% of investment to improvements is already outstanding”. Furthermore, he adds that refurbishment investments are made more regularly. “It is normal to invest in refurbishments every 15 years on average and now it is being done in ten,” he says.

Meliá Hotels is the chain that takes the lead in this investment maelstrom, with a budget that exceeds 125 million euros for the development of five five-star projects on the Costa del Sol and the improvement of its flagship hotel in this destination: the Gran Meliá Don Pepe, which has just closed to undertake a complete refurbishment for 12 months in which it is going to invest 40 million euros. The refurbishment begins just a few months after inaugurating the transformation of the Puerto Banús establishment, which the group has converted into a five-star hotel bearing the ME avant-garde luxury brand.

In addition to this, Meliá is planning establishments of this maximum category in Estepona and Ronda. The brand is about to open in Malaga with another five-star hotel, also known as the Piqué hotel, which is located on the former site of the Andalucía cinema, in Calle Victoria. President and CEO of Meliá Hotels International Gabriel Escarrer raised the investment in this establishment to 50 million. The hotel has 105 double rooms, in addition to eight suites and 15 junior suites, a convention centre, an à la carte restaurant, a terrace with a large heated outdoor infinity pool with solarium next to a bar and a restaurant. It will be the fifth five-star hotel in the city, marking the arrival of the luxury brand ME. Escarrer believes that Malaga city is a natural location for a brand like ME by Meliá.

Among the big projects included in this investment fervour are the 120 million euros Greek luxury hotel group Ikos will spend on its second luxury all-inclusive resort on the Costa del Sol. After the opening in 2021 of the Ikos Andalucía, with which it began its journey in Spain, this company took over the former Marbella Playa hotel to build a 340-room five-star hotel that will open in 2028. The Greek company’s new commitment to the Costa del Sol will generate 1,000 jobs between the development of the work and the operation of the hotel, according to sources from Marbella town hall.

In the same town, another major hotel investment is under way with the redevelopment of the iconic Incosol Hotel, which has already received the green light from the town hall. The budget set aside for the renovation has been described as “historic”, exceeding 87.4 million euros, although estimates suggest it could rise to 150 million, as announced during the project’s launch led by Pelayo Cortina Koplowitz. The new Incosol will feature 168 rooms.

The legendary Los Monteros, now under the Kimpton brand, has also reopened, following an investment of more than 14 million euros, after its acquisition for 47 million in 2022 by Swiss fund Stoneweg Hospitality and Bain Capital Credit.

Selenta Group has also carried out work on luxury hotel Don Carlos, which reopened this summer after a comprehensive, million-euro upgrade. The same happened to the great Las Dunas hotel in Estepona, now managed by AC Marriott, which is already working on adapting the property to welcome guests with a refreshed look from next spring under the group’s luxury Autograph Collection brand, according to Jorge González, director of AC Marriott Málaga Palacio. He says the investment already underway amounts to around 15 million euros.

González also explains that Marriott plans to undertake the renovation of Hotel Larios in the centre of Malaga imminently, nearly three years after the project was first announced, representing an investment of eight million euros. “I expect it to be completed next year. It’s a beautiful project, including an expansion of rooms as an annexed building will increase the total from 45 to over 50,” he adds, also confirming that a full-scale renovation of Málaga Palacio, with 214 rooms, is planned, which will require no less than 15 million euros.

Other major investments include the Boho Club project in Marbella, with a budget ranging from 47 to 87 million euros, depending on building permits to expand from 40 to 200 rooms; almost 23 million for the modernisation of Parador de Nerja, which will remain closed for two years; and the tens of millions earmarked for the first Waldorf Astoria in Spain (and the only resort in Europe), following Higuerón Developments’ purchase of Marbella Golf Country Club, in partnership with Hilton.

Smaller-scale investments include 12 million euros for upgrading the Senator hotel; nearly seven million to convert the Ramón Gómez de la Serna apartments in Marbella into a four-star hotel with 70 rooms, to open in 2026; and four million from Soho Boutique to expand the five-star Castillo de Santa Catalina in Malaga, a project waiting for planning permission for two and a half years, which will add 23 new rooms on an adjoining plot, according to founder Gonzalo Armenteros.

Malaga-based MS Hoteles group has also closed the Amaragua and Tropicana hotels this winter to carry out upgrades on the four-star properties. This long list of projects demonstrates the robust health of tourism on the Costa del Sol.