Europe’s hotel market recorded deals totalling €14.65bn in 2025, driven by interest in the upscale and luxury sectors, according to the European Hotel Transactions Report 2025, from Global Asset Solutions.
The study found that investors were taking a cautious yet strategic approach to the market, as geopolitical volatility was offset by an environment of increased liquidity and falling inflation.
During 2025, travel demand continued to provide a strong foundation for the sector. European flight activity exceeded 2019 levels, with passenger volumes reaching record highs. Business travel also continued its gradual global recovery, contributing to stronger weekday demand in key gateway cities.
The continent saw 267 transactions over the course of the year, representing €14.65bn in total volume. These deals comprised 45,052 keys, with an average transaction size of €54.9m and assets trading at €325,000 per key. Of the total luxury accounted for 34 transactions totalling €3.66bn, with an average transaction size of €107.6m.
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The strength of the upscale and luxury markets were reflected by the development pipeline, with Upscale leading by number of projects (367 projects / 57,028 rooms at Q4 2025), while Upper-Upscale has reached record levels (307 projects / 48,969 rooms). Together, the two segments represent approximately 39% of total projects and 42% of rooms in Europe’s active pipeline (total: 1,717 projects / 252,600 rooms).
Alex Sogno, CEO, Global Asset Solutions and one of the report’s authors, said: “Investors are drawn to the resilience of the high end of the market, illustrated by upper-tier hotels retaining stronger pricing power, supported by sustained ADR gains in key gateways. In contrast, parts of the midscale urban market face margin pressure from elevated operating costs, labour shortages, and price-sensitive guests.
“Upper-Upscale stands out: it delivers higher ADR potential than midscale while offering broader scalability and deeper liquidity than pure luxury, making it attractive for institutional and value-add strategies.
“Although the luxury hotel segment continues to attract interest due to its high profitability, it faces challenges such as elevated operational costs and a more niche market focus, increasing the overall risks. A specialist asset manager with strong local knowledge is key to de-risking these hotels and meeting their full potential.”
France, the UK, Spain, and Germany remained the core of European hotel investment. Together, they accounted for €9.61bn out of the total €14.65bn invested across Europe in 2025, representing approximately 66% of total transaction volume.
Ultra-luxury remained attractive to investors, with the Four Seasons Astir Palace in Vouliagmeni, Greece, the second-largest deal of the year. Greek shipping magnate George Prokopiou completed his acquisition of full ownership of this landmark coastal resort, which includes two five-star hotels on the Athens Riviera and is considered one of Greece’s most exclusive properties. Prokopiou initially acquired a 33.75% stake in October 2024 for €150m, valuing the complex at €450m. In February 2025, he agreed to purchase the remaining 67% from AGC Equity Partners, the National Bank of Greece, and the Hellenic Fund for a reported €413m.
The biggest deal of 2025 was the 1,037-room Mare Nostrum Resort complex in Tenerife. It was sold in an off-market transaction by Selenta Group, backed by Brookfield, to Spring Hotels for €432m.
Sogno said: “Ultra-luxury properties typically combine globally-recognised brands with prime locations and highly-differentiated experiences. Heritage architecture, exceptional food and beverage concepts, and highly-personalised service offerings all contribute to significant pricing power, even during periods of broader market volatility.
“The assets are by their nature complex, but with the correct guidance, can achieve exceptional returns.”
Sogno concluded: “Even in the current geopolitical climate, Europe’s structural maturity positions it to not simply to withstand volatility, but to continue attracting long-term institutional capital as the sector moves further into 2026.”
Guest Contributor
2026-03-18 00:37:00