According to the latest “MarketBeat Europe Hospitality” analysis by Cushman & Wakefield, the European hotel investment volume reached EUR 11.7 billion in the first half of 2024. This figure underscores the sector's continued attractiveness to investors, although the transaction volume shows a 32 per cent decrease compared to the previous year. The market is characterised by demand for large-scale properties and portfolios, particularly in the segment above EUR 100 million, which accounted for 51 per cent of the total transaction volume.
Despite the reduction in the number of transactions, the hotel investment market proved its resilience. This primarily resulted from the robust operational performance of hotels, whose key performance indicators continue to develop positively. These stable operational results significantly contribute to investors' willingness to allocate capital, even in a challenging market environment.
Structure and Investment Preferences
The composition of buyer groups is noteworthy. Private equity funds dominated transaction activity, accounting for 45 per cent of the total volume. Their investment strategies focused on value-add and opportunistic investments, reflecting the current market phase where value appreciation potential is a high priority. Family offices and institutional investors also showed increased interest, accounting for 24 per cent and 18 per cent of completed acquisitions, respectively.
- —Private equity funds: 45 per cent of total volume
- —Family offices: 24 per cent of acquisitions
- —Institutional investors: 18 per cent of acquisitions
Spain proved to be the most active market with a transaction volume of EUR 2.7 billion, followed by the United Kingdom, where investments totalling EUR 1.9 billion were made. France and Germany followed with EUR 1.7 billion and EUR 1.6 billion respectively. These regional focal points illustrate the preferred destinations for hotel investments in Europe.
Outlook and Market Expectations
The market expects a recovery for the second half of 2024, driven by increasing price discovery and a gradual return of investor activity. This development is expected to be supported by the persistently positive operational performance of the hotel sector, which continues to prove resilient against macroeconomic fluctuations. The expectation of interest rate stabilisation could further stimulate the investment market and encourage additional transactions.
