Arrow’s playbook for value creation in Southern European hospitality

European hospitality has entered a new phase of institutionalisation, with strong travel demand, rising international arrivals and increasing competition for assets across Southern Europe. For investors, the opportunity remains compelling, but returns are no longer driven by pricing arbitrage alone.

In this episode of The PERE Podcast, John Calvao, Co-Founder and Head of Real Estate and Hospitality at Arrow Global, sets out how Arrow approaches value creation in a market where complexity, not scarcity, defines the opportunity set.

Drawing on Arrow’s experience investing across Portugal and wider Southern Europe, Calvao explains why the firm focuses on destination resorts and integrated “ecosystems”, where control of the full amenity base, from hotels to golf courses, marinas and residential, enables more resilient, year-round income.

“An ecosystem, to me, is basically the accumulation of different assets that are related to each other and can be interplayed with each other in a single destination,” he says. “When we own all that, we can interplay it… we get more of the upside.”

The discussion also highlights the importance of local execution in fragmented markets, where regulatory complexity and timing risk can materially impact returns.

“If you don’t have local teams who actually live, breathe, speak the language… I find that just extremely difficult to manage,” Calvao adds.

For institutional investors navigating European hospitality today, the message is clear: success depends less on where you invest, and more on how you execute.