My Capstone Project: Exploring for potential New Hotel venues across Barcelona Districts

Introduction

a.   Background

This report is for those who are planning to start a new hotel in the city of Barcelona. It provides a suggestion on what would be the best venue to start a new hotel in a highly visited city with already many good hotels.

Barcelona is one of the most popular tourist destinations in the world. Currently ranked in the Top 10 of most visited cities worldwide and Top 3 in Europe. Barcelona is definitely one of the best places to start up a new hotel business.

In 2018, Barcelona received over 15,8 million visitors, especially in the summer and Christmas time, tourist areas in Barcelona provide huge opportunities for hotels. Even the most expensive hotels, like W Hotel, have 113% of their occupancy rated year in year out, given this scenario, we will go through the benefits and pitfalls of opening a new Hotel in a highly visited city with already many hotels offering their services.

The core of Barcelona is made of 10 districts but, I will later concentrate on only 3 districts, where the busiest venues of Barcelona can be found to target the tourists visiting the city. With that in mind, I will be able to find the Top 3 districts to open a brand new hotel in the city.

b.   Business Problem

This report focusses on the issue of where to open a new hotel in a city like Barcelona, once one has decided to go ahead. Let’s imagine the Dutch investment company Momentum willing to open a new luxury hotel, a first and foremost important decision will be the location for its new hotel.

c.   Interest

- On what basis can Momentum decide its new hotel's location?

- While selecting the place there are key points to consider like they need to check out like where the most well-visited venues of the city are?

- If incase there are already other luxury hotels which have good ratings, will it be risky to open new one near these hotels??

Data Preparation

a. Scrapping Barcelona Districts Table from Wikipedia

I first made use of Districts of Barcelona page from Wiki to scrap the table to create a data-frame. For this, I used requests and Beautifulsoup4 library to create a data-frame containing the name of the 10 districts of Barcelona, Area, population and 1st Major District. We start as below:

After a little manipulation, I created the following data-frame as below —

b. Getting Coordinates of Major Districts: CSV

The next step is to get the coordinates of these 10 districts in Barcelona using a csv data document, using the code as below —

c. Sorting and merging both dataframes

As last, and before going further, both data frames have been sorted and merged in just one table, the data-frame looks as below

d.   Using Foursquare Location Data

For this project, I have used the Foursquare API to retrieve information about the popular venues around these 10 Districts of Barcelona. The call returns a JSON file and it needs to be converted into a data frame. I chose the 100 popular venues for each district within a radius of 2.000 meters. Here below the first five rows of the dataframe obtained from the JSON file that was returned by Foursquare —

Visualization and Data Exploration

a. Folium Library and Leaflet Map:

Folium is a python library that can create interactive leaflet map using coordinate data. The assignment is to find the right areas to invest in a new luxury hotel, so I was looking for hotel, restaurants, and coffee shop venues as popular spots first I create a data-frame with the most common venues per district, as follows – 

Previously, I had mapped the city of Barcelona and the location of her 10 districts.

Next step is to use this data frame to group the venues per district and frequency in order to see the distribution of the most visited venues in the 10 Barcelona districts.

b. Exploratory Data Analysis:

There are 146 unique venue in Barcelona as shown below:

In order to find the top 5 venues of each district I proceeded as follows:

·      Creating a data-frame with pandas one-hot encoding for venue categories.

·      Using pandas groupby on the District column and obtain the mean of the one-hot encoded venue categories.

·      Transpose the data-frame at step 2 and arrange in descending order.

As in the code snippet below —

The code below outputs top 5 venues of each district —

Clustering the Districts

Then I clustered the 10 districts based on the venue categories and use K-Means clustering. So my conclusions will be based on the similarities of venue categories, these districts will be clustered. As here below —

hen, I did put together these 5 major clusters in a leaflet map using Folium library as below —

Results

The following are the highlights of the 5 clusters above:

·     Hotels are clearly located only in Cluster 1 (South West of Barcelona), which makes the choice of the final location very easy, in case Momentum does want to reduce risks.

·     As for restaurants, bars and coffee shops are very popular also in the South West of Barcelona. Especially in Ciutat Vella, Eixample and Gracia districts.

·     As for nightlife is clearly allocated in Cluster 3 under the Les Corts district.

·     Although, the Clusters have variations, a very visible presence is the predominance of bars and restaurants, which is typically for any other Spanish city.

Discussion and Conclusion

It is noticeable that Cluster 1 is the most viable clusters to build a new luxury hotel with guarantees. The proximity to a big number of Restaurants (lunch and dinner venues for guests), Coffee shops and other amenities and accessibility to the station are also very important points to take into account when making the right choice. This cluster has two districts (Sarriá-Sant Gervasí and Eixample) with Hotels in the top three venues. 

In conclusion, this project would have had better results if there were more available data in terms of actual land pricing data within the area, public transportation access and allowance of more venues exploration with the Foursquare (limited venues for free calls).  

However, based on the available data, my advice to Momentum would be to focus on only two Barcelona districts (Sarriá-Sant Gervasí and Eixample) when investing in a new luxury hotel.