Introduction
Building on its resurgence in 2024, the European hotel investment market saw another year of strong performance in 2025, with total transaction volume rising 30% to reach €22.6 billion[1], the highest level recorded since the peak year of 2019 (and the third highest ever), with a €5.2 billion increase over the previous year. Continued interest rate easing by European central banks, combined with resilient hotel operating fundamentals and an abundant supply of investor capital, underpinned a broad-based acceleration in deal activity. Single asset transactions reached a record high of €15.6 billion – the strongest year for single asset hotel investment ever recorded in Europe – whilst portfolio volume held broadly steady at €7.0 billion. With Private Equity activity down by 39% from the previous year, Owner-Operators and Real Estate Investment Companies were the dominant forces in the market, collectively driving the majority of transaction activity. Some 461 transactions were completed, encompassing 725 hotels and more than 107,000 rooms, representing strong, broad-based momentum for the European hotel investment market, although with some clear headwinds now in front of us given the Iran conflict.
Source: HVS – London Office
Total Transaction Volume
- Total transaction volume in 2025 reached €22.6 billion, the highest level recorded since 2019, and an impressive €5.2 billion increase over 2024, with single assets making up nearly 70% of the total.
Source: HVS – London Office
Pricing & Deal Size
- The average price per room was €210,000 in 2025, a decrease of 2.0% from 2024 and 2.4% higher than in 2019;
- Hotels in 2025 transacted for an average price per hotel of €31.1 million (a 7% increase on 2024) and had an average of 148 rooms (a 10% increase on 2024).
Source: HVS – London Office
Seasonality
- Transaction volume was almost equally divided between the first (€11.4 billion) and second (€11.2 billion) halves of 2025;
- Q3 2025 marked a very strong increase on Q3 2024 (+195%).
Source: HVS – London Office
Source: HVS – London Office
Activity by Investor Type
- In 2025, Owner-Operators were the most active, buying and selling roughly €12.3 billion in assets (a 58% increase on 2024), very closely followed by Real Estate Investment Companies, which transacted €12.2 billion of properties (a 98% increase on 2024). Private Equity groups were the third most active with €5.2 billion (a 39% decrease from 2024 levels);
- Hotel Investment Companies, Institutional Investors and REITs largely transacted similar volumes as in 2024;
- HNWIs saw the greatest increase in buying activity (+273%, or a €1.5 billion increase in volume on 2024);
- The largest net buyers were Owner-Operators and HNWIs, with a positive balance of €1.5 billion and €1.2 billion, respectively. The largest net sellers were Hotel Investment Companies and REITs, with a negative balance of €696 million and €416 million, respectively.
Source: HVS – London Office
Source: HVS – London Office
Single Assets
The record-breaking performance of single asset transactions in 2025 was driven by a convergence of favourable conditions: continued monetary easing across European central banks, strong underlying hotel trading performance and a significant increase in investor confidence following the market’s recovery in 2024. These dynamics collectively amplified deal appetite across all buyer categories, with the number of single asset transactions rising 68% to 411, propelling total volumes to their highest level on record.
Source: HVS – London Office
Volume
- Single asset transaction volume in 2025 totalled €15.6 billion, which was 48% greater than 2024 volumes and 29% higher than 2019. This makes 2025 the highest ever year on record for single asset hotel transaction volume in Europe;
- Activity was split evenly between H1 (€7.9 billion) and H2 (€7.6 billion) 2025, with Q2 being the busiest quarter;
- Both the average price per hotel and per room decreased in 2025 (-12% and -6%, respectively, from 2024);
- The three most liquid European single asset markets in 2025 were the UK (€3.4 billion), France (€3.0 billion) and Spain (€2.1 billion);
- Other countries that saw significantly increased single asset activity in 2025 were Germany (+€1.1 billion), Czechia (+€512 million) and Austria (+€222 million).
Source: HVS – London Office
Source: HVS – London Office
Source: Fred Romero, commons.wikimedia.org
Source: HVS – London Office
Cities
- London overtook Paris as the most liquid single asset city in Europe in 2025 with a total volume of €1.8 billion (a 78% increase on 2024), underpinned by numerous large transactions including the W London (brokered by HVS Hodges Ward Elliott), the Holiday Inn Kensington London High Street and the Novotel London West;
- Paris was a close second, with volume reaching €1.6 billion (a 13% increase on 2024), driven by the sale of the Hotel des Grands Voyageurs and the Pullman Paris Montparnasse;
- Prague achieved third place with a total volume of €580 million (up €511 million on 2024), in large part thanks to the sale of the Four Seasons Prague and the Hilton Prague;
- Some of the impressive ranking improvements included Berlin (€560 million and climbing into fourth place) and Munich (€317 million and reaching seventh place).
Source: Goi, www.pixabay.com
Investor Type
- The largest capital movers in 2025 were Real Estate Investment Companies, shifting a total of €8.9 billion in single asset acquisitions and disposals (a 69% increase on 2024);
- Owner-Operators were 2025’s largest net buyers of single assets at €1.7 billion (a €1 billion increase in net acquisitions on 2024), followed by HNWIs at €944 million and Real Estate Investment Companies at €398 million;
- Hotel Investment Companies were the largest net sellers in 2025 at €681 million. Private Equity followed, with total net sales reaching €470 million;
- Institutional Investors remained largely neutral in 2025.
Source: HVS – London Office
Capital by Continent
- Europeans were the most active buyers of single assets in 2025, as usual, accounting for 81% of total transaction activity (up from 79% in 2024), with net acquisitions of €2.2 billion, up from €1.8 billion in 2024;
- Asian and North American investors recorded net sales of €468 million and €205 million, respectively, in 2025, accounting for 3% and 6% of total single asset transaction volume;
- Middle Eastern investors were net buyers in 2025, with acquisitions totalling €540 million (a 254% increase on 2024).
Source: HVS – London Office
Hotel Categories
- Upscale hotels were the most transacted hotel category in 2025, accounting for 50% of hotels sold, and reaching a total volume of €8.1 billion;
- With a high average price per room of €705,000, luxury hotels were the third-largest contributor to total transaction volumes (20% of total transaction volume), despite only accounting for 9% of total hotels sold.
Source: HVS – London Office
Source: Leo-setä, commons.wikipedia.org
Notable Single Asset Transactions
Presented below is a selection of single asset transactions that occurred over the course of 2025.
Source: HVS – London Office
To request an expanded list of transactions, contact [email protected].
Source: www.freepik.com
Portfolio Assets
Following the dramatic step-change in portfolio activity witnessed in 2024, European portfolio transaction volume in 2025 remained broadly stable at €7.0 billion. The UK, which had dominated the 2024 portfolio landscape by some distance, saw volumes fall by €2.2 billion as the exceptional deal flow of 2024 – including Starwood’s acquisition of ten Edwardian hotels and Blackstone’s acquisition of 33 Village Hotels – was not replicated. In its place, a more geographically diverse set of markets emerged, with Sweden, Greece, Germany and Denmark all recording strong increases in portfolio activity.
The composition of portfolio transactions in 2025 reflected an evolving market dynamic. The number of portfolios transacted increased by 22%, whilst the total number of hotels per deal decreased by 11%, pointing to a trend towards smaller, more focused portfolio compositions. The average price per portfolio declined to €140.6 million (a 16% decrease from 2024), whilst the average price per hotel increased to €22.4 million (a 16% increase), consistent with fewer but individually higher-valued assets per transaction.
Source: HVS – London Office
Volume
- Portfolio transaction volume totalled €7 billion in 2025, a modest 3% increase on 2024;
- Most quarters saw a decrease in portfolio transaction activity; however, Q3 recorded an impressive €2.1 billion increase in volume on 2024;
- Q4 2025 witnessed the strongest slowdown compared to 2024, falling 62% short (a €1.1 billion decrease) in total transaction volume.
Source: HVS – London Office
Source: HVS – London Office
Source: HVS – London Office
Cities
- London recorded the highest volume with €487 million in portfolio transactions, which was, however, only a quarter of its recorded portfolio volume in 2024;
- Athens reached second place with a total volume of €271 million, followed closely by Paris at €267 million.
Investor Type
- Acquisition activity by Owner-Operators was the strongest of all investors in 2025, with a total volume of €3.3 billion, representing exactly half of all portfolio transactions;
- Next in line were Real Estate Investment Companies, which acquired roughly €1.7 billion worth of portfolios in 2025 (a €1.1 billion increase on 2024), and amounted to 26% of the total volume;
- Private Equity investors, which represented €4 billion of total acquisition volume in 2024, witnessed a decrease in acquisition activity to €1.5 billion. Despite this, they remained the third most active buyer of portfolios in 2025;
- Private Equity investors were also the highest net buyers in 2025, reaching €564 million (a 77% decline from 2024);
- The largest net sellers in 2025 were REITs, Owner-Operators and Institutional Investors, with net sales reaching €175 million, €151 million and €56 million, respectively.
Source: HVS – London Office
Capital by Continent
- In stark contrast to 2024, European investors reclaimed the top spot as the largest portfolio buyers of 2025, having lost the place to North American investors in 2024. However, with total acquisitions of €5.8 billion and sales of €5.7 billion, European investors’ volume remained relatively neutral in 2025;
- North American investors, on the other hand, were the largest net buyers in 2025, recording net portfolio acquisitions of €599 million;
- Middle Eastern investors were absent across the portfolio investment landscape in 2025, whilst Asian investors recorded total transaction activity of €190 million, having been absent themselves in 2024.
Source: HVS – London Office
Hotel Categories
- As with single assets, upscale hotels were the most transacted type across portfolios in 2025, contributing 61% of the total volume and 46% of hotels sold;
- Midscale hotels ranked second, capturing 17% of total volume;
- Luxury hotels ranked third by volume, totalling €1 billion in 2025 and accounting for 8% of hotels sold;
- With an average price per room of €421,000, luxury hotels in portfolio transactions recorded a 40% lower price per room than their single asset counterparts.
Source: HVS – London Office
Notable Portfolio Transactions
Presented below is a selection of portfolio transactions that occurred over the course of 2025.
Source: HVS – London Office
To request an expanded list of transactions, contact [email protected].
Conclusions
Hotel Transactions in 2025: Record Highs and Broadening Momentum
The European hotel investment market recorded its third highest level of activity ever in 2025, and highest since the record year of 2019. Total transaction volume reached €22.6 billion, representing a 30% increase on the previous year. The momentum that re-emerged in 2024 was sustained and broadened in 2025, underpinned by continued interest rate easing, improving debt market conditions and resilient hotel operating performance across most European markets. With 461 transactions completed, encompassing 725 hotels and more than 107,000 rooms, the year was characterised by both scale and depth of activity.
Single asset transactions reached an all-time record of €15.6 billion, 29% above the previous 2019 peak, with notable deals spanning the full spectrum from luxury assets such as the W London (a deal brokered by HVS Hodges Ward Elliott) and Hotel Cap-Estel, to large-scale city-centre hotels including the Holiday Inn Kensington High Street in London and the Pullman Paris Montparnasse. Portfolio volume held broadly steady at €7.0 billion, as the exceptional deal flow of 2024 gave way to a more geographically diverse set of transactions.
Owner-Operators and Real Estate Investment Companies jointly dominated the market, with the former emerging as the largest net buyers of the year at €1.5 billion. High-Net-Worth Individuals recorded the most significant increase in activity of any investor category, with acquisition volumes rising 273% on 2024, a trend consistent with the broader rise of hotels as an asset class for private capital, as investors seek greater returns in alternative and private markets. Private Equity, by contrast, recorded a 39% decline in total activity.
Leading Markets: UK Leads, France and Germany Surge
The UK retained its position as Europe’s most active hotel investment market, accounting for 25% of total European volume. France rose to second place, pushing Spain to third. Germany delivered one of the year’s most impressive recoveries, reaching €2.5 billion (more than double 2024) and reflecting renewed investor confidence in a market that had lagged the broader European rebound.
London retained its pre-eminent position as Europe’s most transacted city, recording €2.3 billion in deals. Berlin was the standout performer among key European cities, climbing 12 places in the rankings to third position with €700 million.
Looking Ahead
At the commencement of 2026, the tailwinds that drove hotel investment activity in Europe during 2025 remained broadly intact. Interest rates across the Eurozone and the United Kingdom were seemingly ready to continue their downward trajectory, despite a ‘higher-for-longer’ environment persisting in the swap markets owing to continued volatility driven by geopolitical uncertainty, keeping the all-in cost of debt higher than previously expected.
However, the commencement of major military conflict in the Middle East at the end of February has introduced a new layer of complexity to the European hospitality landscape, acting as both an operational headwind and an unexpected catalyst for regional demand.
While the conflict significantly impacts Middle Eastern tourism, a notable substitution effect is emerging as global travellers redirect their itineraries towards perceived safer alternatives in Europe. For example, major carriers flying to Spain, Italy, Portugal and Greece witnessed an immediate surge in bookings ahead of the Easter holiday. The longer geopolitical instability persists in the Middle East, the stronger this trend is likely to become. Travel from Europe to Asia is also likely to suffer (again, to the benefit of inter-European travel) given that much of the air capacity is usually catered to by Middle Eastern carriers. In Europe, 2026 may become the year of short-haul travel.
Should regional tensions prove more prolonged, capital markets are also expected to exhibit a ‘flight-to-safety’ dynamic influencing investment allocation, with investors more likely to focus on core markets than destinations perceived as higher-risk.
The length of these hostilities (and therefore the level of their impact on energy prices, inflation and associated pressures on interest rates) will influence how much of an effect this will have on hotel investment activity in 2026. However, previous experience with major global geopolitical events suggests that investor sentiment is likely to bounce back quickly once the military operations end.