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The European hotel investment market reached €22.6bn (£19.5bn) in 2025, representing a 30% increase on the previous year and the third highest level recorded, according to data from the latest HVS European Hotel Transactions Report.
The report shows that 461 deals involving some 725 hotels occurred last year, and was the strongest performing year since 2019.
While hotels sold for an average price of €31.1m (£27m), spelling a 7% rise on the year prior, the average price per room fell 2% €210k (£181.7m) during the same period.
Owner-operators and real estate investment companies became the dominant market forces, as private equity activity fell by 39% compared with 12 months prior.
The UK accounted for 25% of total European volume, retaining its position as the most active market. France moved into second place, followed by Spain.
Germany recorded a recovery to €2.5bn (£2.1bn), more than double the 2024 figure. London overtook Paris as the most liquid single asset city market with €1.8bn (£1.5bn).
Single asset transactions made up nearly 70% of activity, reaching a record €15.6bn (£13.5bn). Portfolio volumes remained steady with a 3% increase to €7bn (£6.06bn).
European investors were the most active buyers of single assets, while North American buyers were the largest net buyers of hotel portfolios at €599m (£518m).
Lukas Horch, associate at HVS Hodges Ward, said: “The momentum of 2024 was sustained and broadened in 2025, underpinned by continued interest rate easing, improving debt market conditions, resilient hotel operating performance across most of Europe and a strong supply of investor capital.”
Gauthier Champlong, senior associate at HVS Hodges Ward, added: “The tailwinds that drove hotel investment activity in Europe during 2025 had remained broadly intact at the start of 2026. However, the conflict in the Middle East has now introduced a new layer of complexity to the European hospitality landscape, acting as both an operational headwind and an unexpected catalyst for regional demand.”
