Executive Summary: The European Central Bank's decisions to ease monetary policy contributed significantly to improved investor confidence, fostering an environment of increased liquidity.

Furthermore, recent data shows a notable decline in inflation rates in the latter half of the year, encouraging greater investment in the hospitality sector.

Resilient travel demand has underscored the sector's recovery, driving renewed interest from investors. However, the ongoing geopolitical uncertainties have prompted a shift towards disciplined underwriting practices. Investors are now adopting selective capital deployment strategies, ensuring that investments are aligned with thorough risk assessments.

As a result, many transactions are experiencing extended timelines, reflecting a cautious yet strategic approach to navigating the complexities of the current market landscape.

Across the continent, 267 hotel transactions were completed, representing €14.65 billion in investment volume and 45,052 keys traded. The Upscale segment attracted the largest share of capital, followed by Luxury, while Midscale and Economy accounted for the remainder. This distribution reflects a continued investor preference for scalable, resilient assets in an environment shaped by external volatility.

Macroeconomic & Performance Backdrop

Europe’s hotel investment market in 2025 was shaped by easing monetary policy, resilient travel demand, and stabilising inflation, all set against a backdrop of continued geopolitical and policy uncertainty that kept underwriting disciplined and investors selective.

Inflation moved closer to normal levels during the year, helping support real incomes and sustain discretionary travel demand. However, services inflation and wage-related cost pressures remained areas of focus for central bankers and operators alike.

Monetary policy played a central role in shaping market sentiment. The European Central Bank reduced its deposit facility rate from 3.00% in December 2024 to 2.00% by June 2025 and maintained that level through the end of the year. This shift supported improved debt availability and helped restore a degree of confidence among investors.

At the same time, travel demand continued to provide a strong foundation for the sector. European flight activity in 2025 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 broader European economic narrative remained steady throughout the year. Moderate growth, cooling headline inflation, and supportive employment conditions created a relatively stable macroeconomic backdrop. Eurostat estimated euro area GDP growth at 1.5% in 2025, while the wider EU recorded growth of 1.6%. Unemployment stood at 6.2% in December 2025, reflecting a relatively tight labour market. Private consumption expanded by 1.2% in real terms, supporting domestic and intra-European travel demand

Political and geopolitical developments nevertheless continued to influence investor behaviour. Uncertainty around trade policy shifts and broader geopolitical tensions raised hurdle rates for marginal transactions and reinforced a preference for high-quality assets and prime locations. At times, this uncertainty also slowed capital deployment across the wider European commercial real estate market.

Demand fundamentals across the tourism sector remained strong. The European Union recorded a historic 3.08 billion nights in tourist accommodation establishments during 2025. Eurocontrol reported 10.2 million flights, approximately 5% above 2019 levels, an important signal given the role airline capacity plays in supporting higher value inbound tourism

Hotel performance metrics reflected a market transitioning from the initial rate-driven recovery to more balanced growth. Revenue per available room growth was increasingly supported by occupancy rather than rate alone, a dynamic generally viewed as more sustainable from an underwriting perspective, particularly when lenders stress test future cash flows. The continued recovery of business travel also supported weekday occupancy and stronger corporate demand in major European cities.

One element of the long-haul recovery remained incomplete. Travel from Mainland China to Europe had resumed and was steadily improving, but visitor volumes in 2025 remained below 2019 levels and were not expected to fully normalise until 2026. This remains significant because Chinese overnight stays historically play a disproportionate role in supporting luxury retail corridors and urban luxury hotels in markets such as Paris, Milan, and London. 

2025 in Numbers

In 2025, the EMEA hotel investment market recorded 267 transactions, representing €14.65 billion in total volume. These deals comprised 45,052 keys, with an average transaction size of €54.9 million and assets trading at €325k per key.

Post-Script

At the time of writing, the situation in the Middle East is extremely heightened and fluid, with hostilities not only exacting a terrible human cost but also causing physical damage to vital infrastructure and hotels in numerous countries around the region. It is also causing significant disruption to travel, given the significance of cities like Doha and Dubai as major travel hubs. It is too early to judge the impact of this conflict on the global tourism market in 2026, including investment, and this will need to be assessed over the coming months.

This report provides a detailed analysis of transactions completed during 2025, incorporates selected deals from January 2026 and reviews the key trends shaping the market.

Global Asset Solutions (GAS) is the leading independent hospitality asset manager and advisor in EMEA and APAC.

Selected Markets:

• Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovenia, Spain, Sweden, Switzerland & United Kingdom (UK) 
• Only transactions exceeding €17.5 million have been included in this study.
• All prices have been converted to Euros using exchange rates at the time of each transaction.
• Ultra-luxury assets have been classified within the Luxury segment, and upper-upscale assets within the Upscale segment.