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Hotel values across Europe showed a steady 2% rise in 2024 with the help of lower interest rates, modest gains and RevPAR and consistent demand for European travel from international visitors, according to HVS’ latest Hotel Valuation Index.
The global hotel consultancy found that the rise in hotel values was helped by a return to pre-pandemic occupancy levels as well as improving F&B revenues. Some markets have even surpassed values of 2019.
While European hotel performance was solid and costs broadly normalised in 2024, operators also faced the most significant geopolitical and climate change-related events in decades.
Tabitha Watkins, London consulting and valuation analyst at HVS and co-author of the HVI, said: “Although cost pressures remain a point of concern for hoteliers, margins have felt more secure now inflation has normalised. RevPAR growth, albeit more modest than in previous years, and lower interest rates have been positive for hotel values.”
Southern Europe experienced the strongest growth in hotel values, with a close to full recovery to 2019 levels. Eastern Europe, while behind the rest of the region, saw the second-strongest growth as its recovery picked up momentum.
Meanwhile, hotels in Lisbon, Madrid and Edinburgh benefited from a strong influx of leisure visitors, with value rises of between 6% and 8%.
German markets saw the slow but steady return of corporate demand and fares, helping values grow 4.8% in Munich, 3.4% in Frankfurt, 2.8% in Berlin and by 0.9% in Hamburg.
Hotels in Paris remain the most expensive in Europe, topping the HVI valuation table, followed by London, Zurich, Rome, Florence and Geneva.
Margherita Rivetti, London consulting and valuation analyst at HVS and co-author of the HVI, said: “The on-going desire for European travel puts the region firmly at the centre of the world in terms of tourism appeal, with more than 50 million additional overnight stays taken in 2024, compared with 2023, nearly half of which were international visitors.”
However, the HVI warns that while prospects for Europe’s hotels remain relatively strong, the weakening of the dollar would be detrimental given the significance of the US as a source market, and trade tariffs might cause inflation to resurface.
Sophie Perret, managing director of HVS London, added: “In addition, geopolitical shifts such as the breakdown of the transatlantic alliance could have a momentous impact on the hotel industry going forward. The fraying of long-standing Western alliances adds to a sense of uncertainty.”
