2025 was a positive year for the European hotel investment market, with transaction activity strengthening and investor engagement broadening.

Capital continued to flow into the sector, liquidity improved across both equity and debt markets, and pricing expectations became more closely aligned.

Supportive macro-economic conditions and a borrower-friendly, competitive debt environment provide a solid foundation for further growth in transaction volumes in 2026.

EUROPEAN KPI’s

This constructive backdrop is reflected in investor sentiment. Those surveyed in Savills’ inaugural European Hotel Investor Sentiment Survey (see bottom of this page) in December 2025 were cautiously optimistic but decisively engaged, with a strong preference for higher-returning value-add strategies and a net buyer position overall.

Crucially, this appetite is underpinned by long-term structural tailwinds and mega trends that favour travel and hospitality. We see no evidence that these drivers are weakening. On the contrary, they continue to support hotels’ ability to deliver above inflation revenue growth through the cycle, reinforcing the attractiveness of the sector.

Key Results of Savills European Hotel Investor Sentiment Survey 2026

However, in the near term, risks and volatility remain. We are seeing slowing RevPAR growth across Europe, minimum wage costs rising faster than inflation in many countries, and ongoing geopolitical tension in the Middle East.

We therefore find ourselves in an unusual but opportunity-rich phase - relatively early cycle real estate, later cycle RevPAR, and a challenging geopolitical backdrop. This is a market that rewards selectivity, creativity and conviction in deal making.

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