European Hotel Deals Hit €14.65bn in 2025, Report Shows

European hotel investment reached €14.65 billion in 2025, as new analysis from Global Asset Solutions points to a maturing post‑pandemic recovery driven by core markets, upscale assets and selective big‑ticket deals across the region.

Deal Volume Rises Above 2024, Confirms Market Recovery

According to the European Hotel Transactions Report 2025 from Global Asset Solutions, investors completed 267 hotel transactions across Europe last year, representing a total volume of €14.65 billion and around 45,000 rooms changing hands. The findings indicate that hotel real estate has consolidated its return as an institutional asset class after several years of pandemic disruption and cautious underwriting.

All transactions in the study are converted into euros using exchange rates at the time of each deal, giving a consistent view across cross‑border and domestic acquisitions. While the 2025 total sits below the record levels seen before 2020, it marks a clear step up from 2024, when Global Asset Solutions tracked €10.95 billion in hotel transactions, highlighting a double‑digit year‑on‑year rebound in deployed capital.

The new data from Global Asset Solutions align with broader industry evidence of a strengthening European hotel investment cycle. HVS has separately reported that 2024 already represented a turning point for the sector, with transactions surging on the back of improving hotel trading and early interest rate cuts. The 2025 figures suggest that momentum has carried through into a more stable, albeit selective, deal environment.

Analysts note that the 2025 total still lags the more than €22 billion in hotel transactions estimated for Europe in 2024 by some brokerage houses using different methodologies, underlining that headline volumes vary depending on coverage, segmentation and whether portfolios or development deals are included. Even so, the Global Asset Solutions report points to a broad upswing in liquidity and a deeper buyer pool for operational hotel assets.

Core Western European Markets Dominate Capital Flows

The Global Asset Solutions report highlights a strong concentration of capital in a handful of mature tourism and business travel destinations. The United Kingdom, Spain, France and Italy together attracted €9.61 billion of the total 2025 hotel investment volume, accounting for about 66 percent of all transactions tracked in the study.

These four markets benefited from resilient domestic demand, the return of long‑haul visitors and increased airline capacity reported by aviation bodies. Major cities and resort destinations in these countries have seen room revenues exceed pre‑pandemic levels, helping owners justify pricing expectations and giving buyers confidence around underwriting future cash flows.

Outside the big four, Germany continued to register steady volumes, with local market research pointing to hotel investments in the country reaching or surpassing previous years despite pressure from higher financing costs. Other northern and central European countries, including the Netherlands, Ireland and Switzerland, also featured in the transaction rankings, though often with fewer, higher‑value trades.

Advisers note that cross‑border investment remained a defining feature of the 2025 market. International private equity funds, listed vehicles and high‑net‑worth investors targeted European hotels as a play on long‑term tourism growth and as a hedge against inflation, particularly in cities where operators have demonstrated the ability to increase average daily rates faster than cost inflation.

Upscale and Luxury Assets Lead by Volume and Value

By segment, the report shows that upscale hotels captured the largest share of capital in 2025, with 132 transactions totalling €7.66 billion. This category alone accounted for more than half of overall volume, with an average transaction size of about €58 million and almost 25,000 rooms trading at just over €300,000 per key.

Luxury hotels, while recording a smaller number of trades at 34 transactions, generated €3.66 billion in total volume, reflecting the high unit values attached to prime city and resort properties. The segment saw more than 5,500 rooms change hands at an average price of approximately €661,000 per key, underscoring investors’ willingness to pay premiums for irreplaceable locations and strong brand affiliations.

Midscale and economy assets remained active from a deal‑count perspective, with 101 transactions and €3.33 billion in volume, but at lower average ticket sizes and key prices than the upscale and luxury segments. Global Asset Solutions notes that this part of the market attracted buyers focused on operational upside, repositioning and the resilience of budget‑conscious domestic travel.

The report also draws attention to the influence of a small number of landmark single‑asset trades. The five largest individual hotel transactions in Europe during 2025 collectively exceeded €1.73 billion, illustrating how a limited pipeline of trophy assets can materially affect annual figures and drive competition among global investors seeking scale in gateway locations.

Macroeconomic Tailwinds Support Investor Confidence

Behind the headline transaction numbers, a combination of macroeconomic and sector‑specific factors helped underpin buyer confidence in 2025. Eurostat data cited in the Global Asset Solutions analysis indicate that euro area gross domestic product grew by around 1.5 percent in 2025, with the wider European Union expanding by roughly 1.6 percent, offering a modest but positive backdrop for hotel demand.

On the travel side, Eurocontrol reported air traffic volumes in Europe of just over 10 million flights in 2025, about 5 percent above 2019 levels. Higher flight capacity has historically been closely linked to inbound tourism growth, and observers view the rebound as a key driver of occupancy and rate gains across many European destinations.

At the same time, interest rate expectations in late 2024 and throughout 2025 began to stabilise, with several central banks signalling a pause or gradual easing in monetary policy. Sector research from brokerage and advisory firms indicates that lower perceived rate volatility improved underwriting visibility and supported a narrowing of the gap between buyer and seller pricing expectations, even if financing costs remain higher than during the previous low‑rate era.

However, the Global Asset Solutions report emphasises that the investment climate is still shaped by geopolitical uncertainty, elevated operating costs and stricter lending conditions from banks. As a result, investors continued to prioritise prime locations, institutional‑grade assets and clear value‑creation stories, rather than pursuing broad‑based expansion across secondary markets.

Selective Outlook for 2026 as Pricing Remains Under Scrutiny

Looking ahead, publicly available forecasts and investor intention surveys suggest that 2026 could see continued but more selective growth in European hotel transactions. Several global advisory firms report that investors remain highly interested in hotels relative to other real estate asset classes, citing strong cash‑flow dynamics and structural tailwinds from tourism and experience‑led spending.

Nonetheless, the sector faces an ongoing recalibration of pricing. While operating performance has improved sharply in many destinations, particularly in southern Europe, some institutional buyers remain cautious about underwriting peak rates and margins into the long term. This has contributed to prolonged negotiations and, in some cases, a limited number of transactions closing in markets where vendor expectations have not yet adjusted.

Observers also point to a growing divergence between segments. Higher‑quality resorts, luxury city hotels and well‑located upscale assets under recognised brands are expected to remain highly sought after, while older, capex‑heavy properties in secondary locations may struggle to find buyers without significant discounts or repositioning plans.

The Global Asset Solutions findings for 2025 indicate that, despite those challenges, European hotel real estate has firmly re‑established itself on institutional radar screens. With transaction volume at €14.65 billion and a diversified pool of domestic and international buyers active across the continent, the sector enters 2026 with a deeper base of committed capital and a clearer understanding of post‑pandemic value drivers.