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In its latest report, CBRE analyzes trends in the European hotel sector.

By 2024, the number of trips had returned to 2019 levels, including international business travel, which had been among the segments hardest hit by the pandemic. Further growth in demand is expected for 2025, driven primarily by inbound and long-haul tourism. Travel within Europe will remain predominant, with a 15% increase compared to 2019. Long-haul connections, however, have not yet fully recovered, and growth of 11% is projected by the end of 2025. France and Spain continue to lead the rankings in terms of arrivals, but the highest growth rates are recorded in Spain and, even more so, in Italy, which also surpasses France in terms of hotel overnight stays. Positive prospects are also emerging for Germany, Greece, and Poland, thanks to improvements in their hotel offerings

In the medium to long term, the outlook remains positive: annual growth of 4.4% in domestic spending and 5% in international arrivals is projected. The main risks to these forecasts stem from geopolitical tensions and consumer and business confidence, but factors such as the revival of European investment, a possible resolution of the conflict in Ukraine, and the reallocation of global tourist flows could further support the sector. The full recovery of Chinese tourism, however, is postponed until 2026.

From an operational perspective, in the first months of 2025, European RevPAR grew by 3.1% year-over-year, driven by an increase in occupancy (+16 points), while ADR remained stable (+0.6%), signaling a degree of caution in pricing. The five main markets—Italy, Spain, Germany, France, and the United Kingdom—still account for 66% of hotel nights, but markets such as Greece, Poland, Ireland, and Portugal show greater growth potential. RevPAR is expected to grow faster than ADR, thanks to the near-complete recovery of room occupancy, with business tourism expected to close part of the gap with the leisure sector.

The expansion of hotel supply will slow significantly: from the historical rate of 1.3% per year (2011–2024), it will drop to 0.5% between 2025 and 2030, enhancing the sector’s attractiveness from an investment perspective.

In the first quarter of 2025, hotel investments in Europe reached €4.9 billion, in line with the previous year and above the ten-year average, with particularly strong activity in the Nordic countries and Central and Eastern Europe. Italy stands out with over €600 million invested (+148% year-over-year), followed by Germany (€359 million, +41%), while the United Kingdom recorded a decline due to a comparison with the strong Q1 2024. Volume growth is expected in the second half of the year. Private capital dominated the market (45% developers and direct operators, 25% private equity), while institutional investors remain cautious. Yields have stabilized, with slight declines in key markets such as London, Madrid, and Barcelona.

Fundamentals remain solid: stable operating margins, inflation under control, and profitable performance support valuations and fuel interest, particularly from value-add investors seeking opportunities for value creation through branding, active management, and CapEx. The outlook for the European hotel sector appears well-positioned overall for sustained growth throughout 2025.