Hotel values across Europe showed a steady 2% increase in 2024 helped by lower interest rates, modest gains in RevPAR and consistent demand for European travel from international visitors, according to this year’s Hotel Valuation Index (HVI).

The rise in hotel values, with some markets surpassing values of 2019, was helped by a return by many to pre-pandemic occupancy levels, as well as improving F&B revenues and the slow recovery of the MICE segment.

Although European hotel performance was solid and costs broadly normalised, 2024 was a year in which operators faced the most significant geopolitical and climate-change-related events in decades. But while payroll costs grew at above inflationary levels, utility costs gradually decreased and other costs stabilised.

‘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,’ commented HVS London consulting and valuation analyst Tabitha Watkins, co-author of the HVI.

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.

In top position in terms of value growth was Athens, where hotels on a per key basis remain comparatively more affordable than other European cities.

Positive RevPAR growth and continued investor interest prompted a rise in values of 11.8% in Athens. Hotels in Lisbon, Madrid and Edinburgh benefitted from a strong influx of leisure visitors putting them next in the rankings, with value rises of between 6% and 8% while German markets saw the slow but steady return of corporate demand and trade fairs, 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, Zürich, Rome, Florence and Geneva.

‘The ongoing 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,’ said report co-author Margherita Rivetti, consulting and valuation analyst with HVS London.

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 USA as a source market, and trade tariffs might cause inflation to resurface.

‘In addition, geopolitical shifts such as the breakdown of the transatlantic alliance could have a momentous impact on the hotel industry going forward,’ concluded HVS London managing director Sophie Perret. ‘The fraying of long-standing Western alliances adds to a sense of uncertainty.’

The annual HVI is a hotel valuation benchmark monitoring annual percentage changes in the values of typically four- and five-star hotels in 31 key European cities. You can download the full 2025 European Hotel Valuation Index by Tabitha Watkins, Margherita Rivetti and Sophie Perret here.