Investing in hotels is no longer about choosing the most touristic city: it’s pure mathematics between profitability, taxation and growth projection. While Spain celebrates its second-best historical year in hotel investment, Abu Dhabi deploys a model that promises returns between 8% and 14% annually without direct taxation on profits. The burning question: does it still make sense to bet on the Mediterranean when the Gulf offers double the net profitability?
The tension skyrocketed in January 2026 after confirming that hotel investment in Spain reached 4.275 billion euros in 2025, a 30% year-on-year jump. But the data hides a reality: that volume reflects market maturity, not accelerated expansion, just as Abu Dhabi multiplies developments in areas like Corniche Road and Capital Gate, with 10-year Golden Visas linked to investments from 545,000 dollars. The tax differential between both destinations represents between 20% and 30% higher accumulated net profitability over two decades.
The Spanish boom: record with saturation signals
The Spanish hotel sector closed 2025 with 159 transactions totaling 21,767 rooms for 3.986 billion euros, a 30% increase over the previous year. Domestic investors led 72% of operations, with hotel chains signing 42 operations for 1.384 billion, their best historical record.
The vacation segment regained leadership with 55% of total investment, 2.336 billion concentrated in the Canary Islands. Barcelona stood out in urban with 20 operations for 712 million euros. However, these numbers reflect consolidation of a mature market where margins are compressed and competition intensifies.
The Spanish market has received more than 18,000 million euros in the last five years, recurrently exceeding 3,000 million annually, indicating saturation in prime areas. Investors who entered in 2020-2021 captured the best opportunities; those arriving now pay ceiling prices.
Abu Dhabi: tax mathematics and guaranteed returns
Facing Spanish maturity, Abu Dhabi structures its hotel offering with guaranteed returns of 8-14% annually in mixed projects combining residential, hotel and commercial. Areas like Corniche Road, Aljada and Capital Gate offer minimum investment from 545,000 dollars with 10-year Golden Visa included.
The decisive advantage lies in the tax structure: zero taxes on rental profits, zero taxation on capital gains, and zero withholdings on remittances abroad. A Spanish investor generating 100,000 euros annually in Abu Dhabi reinvests 100%; the same flow in Spain is taxed up to 28% in corporations plus personal income tax on dividends, eroding accumulated net profitability.
- Gross hotel profitability: 8-14% annual guaranteed vs 4-6% in urban Spain
- Effective tax burden: 0% in Emirates vs 28-45% in Spain (corporate + income tax)
- Golden Visa: 10 years with investment from 545,000 USD vs cancelled in Spain since 2024
- Projected growth: +12% annual in Abu Dhabi occupancy vs +2-3% Spain (mature market)
Hotel projects in the Emirates generate constant tourist flows, benefiting local commerce and apartment owners. The mixed city model distributes risk among education, tourism, retail and business.
The tax differential as competitive barrier
Beyond gross figures, the tax mechanism determines real profitability over 20 years. An investor who allocates 1 million euros to hotels in Spain with a 5% annual gross return will generate 50,000 euros annually; after effective taxation of 35%, it remains at 32,500 net euros. The same capital in Abu Dhabi with a 10% return produces 100,000 euros without taxation: 67,500 euros more per year, cumulative.
This explains why French funds allocated 345 million euros to Spanish hotels in 2025 while Spanish investors explore the Emirates: the former seek stability in a mature market; the latter, maximization of net return.
| Concept | Spain | Abu Dhabi |
|---|---|---|
| Minimum investment | 500,000-1M€ | 545,000 USD (Golden Visa) |
| Gross profitability | 4-6% | 8-14% |
| Total tax burden | 28-45% | 0% |
| Real net profitability | 2.2-4.3% | 8-14% |
The Emirati model adds return guarantee in many projects during the first 3-5 years, eliminating occupancy risk. Spain offers legal stability and consolidated market, but without protection against demand drops.
2026 projection: where capital will be
The next 12 months will define the repositioning of institutional capital in hotels. Spain closed 2025 with domestic investors concentrating 63% of total volume, a sign that international capital seeks geographies with greater revaluation potential. Abu Dhabi projects completing developments in Corniche Road and areas adjacent to Capital Gate with deliveries scheduled for second half of 2026.
The question is not whether Spain will continue to attract investment—it will, due to stability—but whether new entrants will capture competitive returns or pay ceiling prices in a saturated market. The Emirates offers entry in an accelerated growth phase with structural tax advantages that Spain cannot replicate without deep tax reform.
| Actor | Expected strategy | Timeline |
|---|---|---|
| Spanish funds | Emirates exploration for diversification | Q1-Q2 2026 |
| Retail investors | Spain consolidation, Abu Dhabi test with Golden Visa | 2026-2027 |
| International institutional capital | Repositioning towards Persian Gulf | 2026-2028 |
The 6-10 percentage point differential in net profitability will not disappear as long as the current tax structure subsists. Spain maintains advantages in legal stability, cultural proximity and mature market; Abu Dhabi counterattacks with zero taxation, guaranteed returns and growth exceeding 10% annually. The decision depends on the profile: conservative seeks Spain; return maximizer, Emirates.
Key questions to understand everything
Q: What is the minimum investment for a hotel in Abu Dhabi with Golden Visa?
A: 545,000 USD (approx. 500,000€) in properties linked to a 10-year Golden Visa.
Q: Is Spain still competitive after the 2025 saturation?
A: Yes in premium urban areas and consolidated vacation zones, no for new entries seeking maximum profitability.
Q: What real net profitability can I expect in each destination?
A: Spain: 2.2-4.3% net after taxes. Abu Dhabi: 8-14% without direct taxation.
Q: Do Emirates projects have occupancy risk?
A: Many offer 3-5 year return guarantee, eliminating that risk in the initial phase.
