Europe’s hotel investment market continued its strong recovery in 2025, with total transaction volume rising 30 percent year-on-year to €22.6 billion, highlighting sustained investor confidence despite economic uncertainty, elevated financing costs and ongoing geopolitical challenges.
According to the latest HVS European Hotel Transactions Report, the market recorded 461 hotel transactions involving 725 properties and more than 107,000 rooms, making 2025 the strongest year for European hotel investment since 2019 and the third-highest annual transaction volume on record. The findings indicate that investors remain optimistic about the long-term prospects of the hospitality sector as travel demand continues to recover across Europe.
Lower Interest Rates and Strong Hotel Performance Boost Confidence
HVS attributed the market’s strong performance to improving financial conditions, including easing interest rates and better access to debt financing. The report also highlighted resilient hotel operating performance across many European destinations, with healthy occupancy levels, improving room rates and robust tourism demand encouraging both institutional and private investors to expand their hospitality portfolios. These factors have helped offset broader macroeconomic uncertainties, including inflationary pressures and geopolitical risks.
Investment Momentum Continues in 2026
The report suggests that strong investment activity has continued into 2026, with several high-profile hotel acquisitions already completed. Among the most notable transactions was the acquisition of the 266-room Zurich Marriott Hotel by Pictet Alternative Advisors in partnership with Vertell Asset Management. The hotel will continue to operate under a long-term management agreement with Marriott International while undergoing a phased renovation programme scheduled for completion in early 2027.
Major Portfolio Acquisition Across Europe
Another significant transaction involved the purchase of the Pentahotels portfolio, comprising 11 hotels and 1,808 rooms across Germany, Belgium and France. The portfolio was acquired by Ironstone Group and Ogilvy Management from Aroundtown in a deal valued at approximately €275 million. The new owners plan to reposition several of the properties under IHG Hotels & Resorts brands, including Holiday Inn, Voco, and Garner, reflecting growing investor interest in value-enhancing redevelopment opportunities.
Demand Extends Beyond Luxury Hotels
Investment activity was not limited to landmark luxury properties. The report noted additional acquisitions involving hotels in Oxford, Paris, Essen, and Bournemouth, demonstrating continued investor demand across luxury, upscale and select-service hotel segments. Rather than focusing solely on premium trophy assets, investors are increasingly targeting strategically located hotels with strong potential for renovation, repositioning and long-term value creation.
Single-Asset Transactions Reach Record Levels
HVS reported that single-asset hotel transactions reached a record €15.6 billion in 2025, accounting for the largest share of investment activity. European investors dominated the market, representing approximately 81 percent of all single-asset acquisitions. Upscale hotels attracted the highest level of investment, reflecting continued confidence in institutional-grade assets located in major gateway cities and established leisure destinations.
Long-Term Outlook Remains Positive
Although investors continue to monitor inflation, financing conditions and geopolitical developments, the latest transaction data indicates that Europe’s hospitality sector remains one of the world’s most attractive real estate investment markets. With international travel continuing to recover and hotel fundamentals strengthening across many destinations, industry analysts expect investor interest to remain robust in the coming years. The report concludes that improving market conditions, resilient tourism demand and opportunities to enhance asset value through renovation and repositioning are likely to sustain investment momentum across Europe’s hotel sector well into the future.
