Feasibility Study for a Furnished Apartments Project in Spain: Comprehensive Analysis of Opportunities and Challenges

Executive Summary

The furnished apartments project in the tourism and hospitality sector in Spain targets a promising market opportunity. With an investment of €350,000, it achieves a Net Present Value of -€174,796, an Internal Rate of Return of -12%, and a payback period of — years.

Assumptions and Basis

The figures in this study are based on project data, the nature of the tourism and hospitality sector in Spain, and local market indicators, according to the following assumptions:

Basis of Assumptions: Figures are based on an average occupancy of 65-70% and an average rental price of 150 euros/night, considering operating costs, marketing, and local taxes in Spain.

Project Description and Opportunity

The project aims to establish and manage high-quality furnished apartments in popular Spanish tourist cities or high-demand coastal areas. The project offers flexible and comfortable accommodation options for business travelers, tourists, families, and digital nomads, who seek an alternative to traditional hotels that provides more space and self-service facilities. The business model focuses on delivering an excellent hospitality experience, supported by technology for bookings and management, leveraging the growing Spanish tourism sector, which saw 96.8 million international visitors in 2025. The project targets customers who value independence, comfort, and value, especially those staying for medium to long periods.

Market and Demand Study

Spain is a leading global tourist destination, having welcomed 36.8 million international tourists in the first five months of 2026, with spending reaching 50 billion euros. International tourist numbers are expected to reach 100 million by the end of 2026. The furnished apartments sector in Spain is experiencing rapid growth, with the market size estimated at USD 2.63 billion in 2024 and projected to reach USD 8.74 billion by 2033, with a CAGR of 14.9% from 2025 to 2033. This growth is due to increased demand for medium and long-term stays from business travelers and digital nomads, driven by new residence visas for remote professionals in Spain. Families and small groups also prefer furnished apartments for their flexibility and affordability compared to multiple hotel rooms. However, there are challenges related to over-tourism in some areas, leading to pressure on public services and natural resources, and increased regulation of short-term rentals.

Market Sizing (TAM / SAM / SOM)

The Total Addressable Market (TAM) was estimated based on the size of the Spanish hospitality market for 2026, which was valued at USD 125.34 billion. The Serviceable Available Market (SAM) represents the furnished and serviced apartment sector, which was estimated at USD 2.63 billion in 2024 and is expected to reach USD 8.74 billion by 2033. The Serviceable Obtainable Market (SOM) represents a realistic percentage of the SAM, considering the initial operational capacity of the project and competition, estimated at 1% of the projected SAM for 2026.

Basis of Sizing: The total market size represents the Spanish hospitality sector for 2026. The SAM represents the serviced and furnished apartment sector in Spain for 2033, and the SOM equals 1% of the SAM, considering sector growth and competitiveness.

Unit Economics

Measures the profitability of each sales unit/customer — the most accurate feasibility indicator:

Competitive Analysis

Competition in the furnished apartments sector in Spain is characterized by numerous players, from large companies such as hotel chains expanding into this sector to individual owners. The sustainable competitive advantage of the project includes focusing on strategic locations in high-demand cities or coastal areas, providing exceptional customer service, attractive and modern interior design, and offering facilities and services that exceed guest expectations. An advantage can also be achieved by investing in technology to streamline booking and management operations, and focusing on targeted digital marketing to attract specific customer segments such as digital nomads and families.

Go-to-Market Strategy and Pricing

The go-to-market strategy includes comprehensive digital marketing through online travel agencies (OTAs) such as Booking.com and Airbnb, as well as creating a dedicated project website to increase direct bookings. Emphasis will be placed on search engine optimization (SEO) and social media marketing to reach the target audience. Pricing will be determined based on factors such as seasonality, competitor occupancy rates, and local events, aiming to strike a balance between high occupancy and average nightly rate. Special offers for long stays will also be provided to attract digital nomads and business travelers.

Capacity and Operations

The project starts with 5-7 furnished apartments, targeting an occupancy rate of 65-70% in the first year, gradually increasing to 75-80% in subsequent years with improved marketing and reputation.

Daily operations include managing bookings, guest check-ins and check-outs, regular cleaning and maintenance services, and providing 24/7 guest support. Emphasis will be placed on maintaining high standards of cleanliness and quality to ensure guest satisfaction and positive reviews. Property Management Systems (PMS) will be used to streamline operations and improve efficiency.

Technical aspects include selecting suitable properties that comply with the regulatory requirements for tourist apartments in Spain. Apartments should be in easily accessible locations, close to public transport and tourist facilities. The project requires obtaining the necessary licenses to operate tourist apartments, which may vary by region. Reliable suppliers for furniture, furnishings, maintenance, and cleaning services will be contracted to ensure high quality and a comfortable experience for guests.

Projected Income Statement (5 years)

Investment Cost Structure

Cash Flow and Breakeven Point

Estimated breakeven point at annual revenue ≈ €196,429 (~131% of first-year revenue), with a contribution margin of 70%. Cumulative cash breakeven beyond the study horizon.

Funding Structure

Sensitivity Analysis (Revenue × Operations)

Impact of combined changes in revenue and costs on Net Present Value:

Scenario Analysis

Expected Present Value (Weighted): ؜-١٧١٬٩١٨ €.

Risk Analysis and Management

Organizational Structure and Team

The proposed structure consists of a project manager overseeing general operations, a staff member responsible for bookings and customer service, and a maintenance and cleaning team. Some services, such as digital marketing and technical support, can be outsourced. The team should have experience in the hospitality sector and customer service.

Legal and Regulatory Aspects

The project requires full compliance with local and regional regulations related to tourist apartment rentals in Spain. These regulations may include obtaining specific licenses, adhering to safety standards, and paying tourist taxes that vary by region and city. In some cities, such as Barcelona, there are increasing restrictions on short-term rentals, necessitating a deep understanding of the regulatory environment in the chosen area.

Expansion and Sustainability Plan

Future expansion can involve adding more apartments in the same area or in other high-demand Spanish cities. Partnership opportunities with real estate developers or investors can also be explored to finance expansion. In the long term, developing a private brand for furnished apartments and expanding the range of services offered, such as providing guided tours or local experiences for guests, can be considered.

Environmental, Social, and Governance (ESG) Impact

The project aims to reduce environmental impact by adopting sustainable practices such as optimizing energy and water consumption, effective waste management, and using eco-friendly products. The tourism sector in Spain faces environmental and social challenges due to over-tourism, which necessitates a focus on sustainable tourism and positive interaction with local communities. These practices can contribute to attracting a growing segment of tourists interested in sustainable travel.

Conclusions and Recommendations

The furnished apartments project in Spain presents a promising investment opportunity given the strong growth of the tourism sector and increasing demand for flexible accommodations. With a proposed initial capital of €350,000, good returns can be achieved through effective management and a focus on quality and targeted marketing. However, investors must evaluate the risks associated with changing regulations, operational costs, and competition, and ensure careful site selection and adherence to environmental and social standards to ensure long-term sustainability and success.

Frequently Asked Questions

Is a furnished apartment project profitable in Spain?

Yes, a furnished apartment project can be very profitable in Spain, especially in tourist cities and coastal areas, with a net ROI that can reach 5-7% or more in some cases.

How much does it cost to establish a furnished apartment project in Spain?

Costs vary, but the proposed initial capital for a 5-7 apartment project is estimated at around 350,000 euros, covering the purchase or lease and furnishing of apartments, licenses, initial marketing, and operating expenses.

What licenses are required for a furnished apartment project in Spain?

Licenses vary by region, but generally require a specific tourism license for the establishment, property registration with local authorities, and compliance with safety and hygiene standards. It is advisable to consult a local legal advisor.

What is the average daily rental price for furnished apartments in Spain?

The average daily rental price for furnished apartments in Spain is about 150 euros, but it varies significantly depending on location, apartment type, and season.

What is the expected occupancy rate for furnished apartments in Spain?

New furnished apartments aim for an occupancy rate of 65% to 70% in the first year, with potential to increase to 75%-80% with improved performance and marketing.

Are there additional taxes on tourist rentals in Spain?

Yes, in addition to income tax (IRPF for residents, IRNR for non-residents), some regions and cities may impose tourist taxes on each night's stay. The government may also plan to impose a 21% VAT on short-term rentals.

Sources and Disclaimer

• Mordor Intelligence - Spain Hospitality Market Size & Industry Analysis 2031
• Grand View Research - Spain Serviced Apartment Market Size | Industry Report 2033
• Arum Group - Serviced Apartments in Spain: The Rise of Flexible Living
• Phocuswright - Spain Travel Market Report 2023-2027
• INE (Spanish Statistical Office) - Tourist Arrivals & Spending in Spain
• Chekin - Tourist Tax in Spain: 2026 Rates, Rules and How to Collect It

Disclaimer: This is a guiding study that provides financial analysis according to adopted industry standards; verify figures locally according to your project's reality before any investment decision.