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The European hotel investment market saw its transaction volume surge by 62% year-on-year – the highest level recorded since 2019 – according to the latest HVS European Hotel Transaction Report.
The firm attributed the buying and selling activity to easing interest rates and “abundant” funding from private equity investors, most notably for large portfolio deals. This gave a total transaction volume for the year of €17.4bn (£14.5bn), having risen by €6.7bn (£5.6bn) since 2023.
Hotels across Europe fetched an average price of €29m (£24.2m) in 2024, spelling a rise of 5% on the year before – with the average price per room reaching €215,300 (£179,994), rising by 9% on the 2023 figure, and around 5% when compared with 2019.
The UK was found to be the most active country in terms of total asset activity by volume, with 36% of deals, followed by Spain (15%), France (12%), and Italy and Germany taking a 6% share each. London, Paris and Madrid topped the table in terms of city transactional activity.
Gauthier Chamlong, co-author of the report, said: “London retained its position as Europe’s most transacted city, with €3bn (£2.5bn) in deals – matching the combined total of the next five most active cities. This was largely driven by major portfolio transactions, reinforcing London’s status as a key global investment hub.”
Private Equity investors proved the most active investor type in 2024, buying and selling nearly €8.6bn-worth (£7.1bn) of assets – an increase of over 300% on 2023, followed by owner-operators who transacted €7.8bn-worth (£6.5bn) of properties, up 90% on the previous year.
Single asset transaction volume totalled €10.5bn (£8.7bn) helped by interest rate cuts across European central banks and strong hotel trading fuelling investor appetite.
London ranked second in terms of single asset transaction volume, with deals reaching €1bn (£840m) followed by Madrid, Venice and Athens. Notable deals in London involved the Six Senses in Bayswater and The Standard in Kings Cross.
Matthias Hecht, co-author of the report, added: “As we move further into 2025, the availability and cost of financing will remain a focal point for hotel investors. With interest rates expected to decline further, capital markets should see a resurgence in liquidity, further boosting transaction volumes across key European markets.
“While refinancing challenges persist, banks and alternative lenders have demonstrated greater flexibility in restructuring debt, and hotel assets continue to outperform other real estate classes in investor preference.”
