The German hotel market remained stable in the second quarter of 2026. Despite geopolitical uncertainties and a challenging financing environment, the sector benefited from robust demand. Business trips, trade fair and congress events, as well as a consistently high frequency of leisure travel, contributed to stable fundamentals. A transaction volume of approximately EUR 625 million in the first half of the year underscores that, despite a challenging market environment, value-retaining hotel investments are realisable, provided the operational basis is solid.
Tourism remains a key driver of demand. In particular, the major city and metropolitan regions, as well as established leisure destinations, recorded constant overnight stay demand and stable occupancy rates in the first half of the year. Robust domestic demand was a central factor. Additionally, structural trends such as shorter but more frequent trips, an increasing intertwining of business and leisure travel ("bleisure"), and growing demand for flexible accommodation concepts are having an impact. These developments are increasingly benefiting hotel projects beyond classic metropolitan locations.
Focus on Operational Performance and Operator Structures
Analogous to developments in the European hotel investment markets, the focus of many investors is increasingly shifting to the operational performance of operators. The operator's creditworthiness, the scalability of the business model, efficient cost structures, and the design of lease and management agreements significantly influence risk assessment and pricing. Operators with strong brands, digitised processes, and efficient cost structures particularly benefit from this development.
In parallel, consolidation in the operator environment continues. Platforms with scalable brands, as well as hotel companies with high cost and technology expertise, are expanding their market position. International hotel groups are once again increasingly focusing on the German hotel market. Operator changes, restructurings, and expiring contract structures create scope for new market participants and concepts. New players such as Brown Hotels or Prism are entering the market and expanding the spectrum of established operator and brand concepts. Structured partnerships, as well as platform and joint venture models, are gaining importance and shaping the market structure, as they enable investors to play a more active role in value creation.
Flexible operating concepts continue to drive transaction activity. Serviced apartments remain a dynamic segment of the hotel market. Increasing professional mobility, the immigration of international skilled workers, and the ongoing housing shortage are boosting demand for temporary forms of accommodation and investor interest. This is reflected in the investment market, where, in addition to classic hotel transactions, extended-stay products are also increasingly sought after by institutional and private investors. The sale of a Penta hotel portfolio for over EUR 100 million represented the largest portfolio transaction in the first half of the year. Similarly, the sale of the luxury resort "Der Öschberghof" and the "BMW Boarding House" in Munich attracted attention. These transactions demonstrate that investment success depends less on the product segment and more on the quality of the asset, the operator constellation, and the individual investment strategy.
International Investors and Interest Rate Adjustments
The recent interest rate adjustment by the ECB has brought the financing side more sharply into focus. This will not lead to a blanket revaluation of the hotel market in the short term, but it does increase investors' sensitivity regarding financing costs, exit yields, and the long-term viability of lease agreements. The interest of international investors in the German hotel market is growing; Germany continues to be perceived as a transparent and relatively stable market. Operator quality, contract structures, and the long-term earning power of the assets are becoming more prominent in these investment decisions. According to Andreas Ewald, Head of Hotel Germany and Co-Head EMEA Hospitality Group at Colliers, there is increasing interest from international investors in Germany and Europe. The focus is not only on individual properties but increasingly on platforms, operator structures, and vertically integrated investments, which enable scalability and operational value creation. Further owner-operator platforms are pushing their expansion into Germany. This development is supported by Europe's attractiveness as an investment location, which, against the backdrop of ongoing global uncertainties, is once again attracting increased international capital flows.
