Purchasing a Hotel Room in Europe: Comparative Analysis of Greece, Spain, and Portugal

The idea of ​​buying hotel apartments in Europe is increasingly attracting investors who are looking for real estate to simultaneously obtain a residence permit with the possibility of living there personally (for a certain period of time: as a rule, from 7 to 30 days, depending on the agreement with the management company), and the rest of the time to hand over the hotel management to receive a stable passive income from rent.

Greece, Spain and Portugal are among the most popular destinations, thanks to their thriving tourism industries, attractive property markets and interesting investment opportunities. We discuss the benefits and key factors to consider when buying a hotel apartment in these three southern European countries.

Hotel apartments are a separate real estate cluster that is located at the junction of residential and hotel. These are ready-to-rent apartments that combine home comfort and the level of service offered by world-famous hotels.

Hotel apartments differ from regular apartments in that they have a higher level of comfort and service, as well as the ability to live in them for a certain period of time. Apartments in hotel complexes combine all the advantages of apartments and traditional hotels.

Greece has long been a favorite tourist destination due to its rich history, stunning islands, and beautiful beaches. Over the past few years, the Greek tourism market has experienced remarkable growth, leading to increased interest in hotel investments.

Key Considerations:

• Tourist Seasonality: Greece’s tourism is heavily seasonal, with peak seasons in summer. Investors should be prepared for lower occupancy rates in the off-season.
• Maintenance Costs: Properties on islands can require higher maintenance costs due to the maritime climate.
• Market Saturation: In highly popular areas, there is growing competition among hotel accommodations, which can affect rental rates.

Market Overview:

• Tourism Growth: Greece saw record-breaking tourism numbers in recent years, bolstered by visitors from around the globe. The strong tourism flow has generated demand for high-quality accommodations, especially on popular islands like Santorini, Mykonos, and Crete.
• Property Prices: Hotel apartment prices in Greece remain competitive compared to other European destinations. Prices can vary widely depending on the location, with properties on famous islands being more expensive than those on the mainland.
• Return on Investment (ROI): The booming tourism industry ensures high occupancy rates, especially in key destinations. Many investors have reported strong rental yields, particularly during the summer months.
• Golden Visa Program: Greece offers a residency permit to foreign investors who purchase property worth at least €250,000. This has attracted many non-EU citizens seeking a foothold in Europe.

Spain continues to rank as one of the top tourist destinations in Europe, offering diverse cultural experiences, beautiful coastlines, and a well-developed hospitality sector. The country's real estate market offers a wide array of opportunities, including the purchase of hotel apartments.

Key Considerations:

• High Demand Areas: Certain areas, especially Barcelona, face stricter regulations on tourist accommodation licenses. Investors should research regional laws before purchasing.
• Tourism Year-Round: Spain’s diverse climate and geography mean that certain areas attract tourists year-round, providing more consistent rental income compared to other countries.
• Fluctuating Property Prices: Spain’s property market is more volatile than Greece’s, and prices can fluctuate based on market demand and broader economic conditions.

Market Overview:

• Tourism Strength: Spain welcomed over 80 million tourists annually before the pandemic, and the numbers are quickly recovering. Key areas for investment include the Costa del Sol, Barcelona, and the Balearic Islands (e.g., Mallorca and Ibiza).
• Property Prices: Real estate in Spain is generally more expensive than in Greece, particularly in high-demand areas like the Mediterranean coast. However, there are still affordable options in less tourist-heavy regions.
• ROI: Investors in Spain can expect stable rental yields thanks to the country’s well-developed tourism infrastructure. Popular coastal areas often experience high demand throughout the year, particularly during the summer season.
• Residency via Investment: Spain also offers a Golden Visa program, requiring an investment of €500,000 in real estate. This allows investors and their families to live in Spain and travel across the Schengen zone.

Portugal has emerged as one of Europe’s most attractive destinations for property investment, driven by its Golden Visa program, affordable property prices, and growing tourism industry. The country’s picturesque cities and stunning coastline draw tourists and property buyers alike.

Key Considerations:

• Tourist Flow: Although tourism in Portugal is rising rapidly, it’s still somewhat seasonal. Coastal areas like the Algarve experience high occupancy rates during the summer, while Lisbon and Porto attract tourists year-round.
• Emerging Market: While Portugal’s real estate market has grown rapidly, some areas still offer potential for value growth, making it an appealing option for long-term investors.
• Government Incentives: Beyond the Golden Visa, Portugal offers other incentives for property investors, including tax benefits for non-residents.

Market Overview:

• Tourism Expansion: Portugal’s tourism industry has grown significantly in recent years, with Lisbon, Porto, and the Algarve being the most popular areas for visitors. The Algarve, in particular, is a hotspot for hotel apartment investments due to its long summer season and appeal to international tourists.
• Property Prices: Portugal offers relatively affordable property prices, although areas like Lisbon and the Algarve have seen considerable price increases. Compared to Spain and Greece, Portugal’s real estate market offers a balance between affordability and high quality.
• ROI: Portugal’s rental yields have been increasing as more tourists discover the country’s attractions. The Algarve is particularly attractive for investors seeking high seasonal rental income.
• Golden Visa Program: Portugal’s residency-by-investment program has been a major draw for foreign investors. A minimum investment of €500,000 in real estate (or €350,000 for renovation projects) qualifies buyers for a residency permit, with pathways to citizenship after five years.

• Price Range: Greece tends to offer the most affordable hotel apartments, followed by Portugal, with Spain generally being the most expensive.
• Tourism Demand: Spain is the most established market with year-round tourism, while Greece and Portugal are more seasonal but are rapidly growing.
• Residency Programs: All three countries offer residency-by-investment programs, though the minimum investment amounts differ, with Greece having the lowest threshold.
• Return on Investment: Investors can find solid ROI in all three countries, though Spain’s tourism sector provides the most stability. Greece and Portugal offer opportunities for higher returns in emerging areas.

For investors looking to purchase hotel apartments, each of these countries has distinct advantages. Greece offers competitive pricing and strong growth potential, Spain guarantees a well-established market with high demand, and Portugal presents a balance of affordability and growth. The final choice depends on the investor’s budget, risk tolerance, and long-term goals.

1. Obtaining a residence permit. Investors who purchase hotel apartments in Turkey, Cyprus or Italy may apply for a residence permit in these countries. A residence permit gives the right to live, work and study in the country for a certain period. Depending on the country and the terms of the program, a residence permit can be extended or converted into permanent residence status.

2. Possibility of personal residence. The investor can live in the apartment for free for 1-3 weeks a year, depending on the agreement with the management company. This will allow him to personally evaluate the quality of the property and the level of service, as well as save personal funds.

3. Passive income. The rest of the time, the apartments are managed by the hotel, which rents them out to tourists. The investor receives a stable passive income without participating in the property management process.

4. Rising property prices. The real estate market in Portugal, Greece, and Spain is showing a steady increase in prices. This means that the cost of hotel apartments will increase over time, providing the investor with additional profit when selling.

5. Variety of offers. On the market, you can find hotel apartments of different price categories, areas, and comfort levels. This allows you to choose the most suitable option in accordance with the investor's budget and preferences.