European hotel transactions reached a five-year high in the first half of 2024, exceeding €11.6 bn, the highest six-month volume since 2019, according to data from Cushman & Wakefield.
In the second quarter, transaction volumes reached €5.8 bn, nearly double the €3.0 bn level reached at the same time in 2023.
Luxury hotels such as the Pullman Paris Tour Eiffel, the Hilton Paris Opera, Six Senses London, the Shelbourne Hotel Dublin, and the Park Hyatt Zürich, represented nearly half of the total transaction volume in H1.
The UK, Spain, and France dominated the European hotel market, accounting for €7.8 bn or over two-thirds of total transactions, and 62% more than in H1 2023.
London emerged as the most active city for hotel deals (€2.6 bn, +215% y/y), followed by Paris (€1.1 bn, -4%), Dublin (€543 mln, +554%), Barcelona (€364 mln, -12%), and Rome (€238 mln, +184%).
Future prospects for the European hotel market remain positive, with projected transaction volumes exceeding €20 bn for the year, driven by increasing debt liquidity and strong hotel performance.
Jon Hubbard, head of Hospitality, EMEA at Cushman & Wakefield, said: ‘The trading performance of European hotels experienced a ‘Taylor Swift bounce’ in the first half of this year, with high customer demand partly linked to the major events that took place across the continent, such as Euro 2024, the Olympic Games, and Swift’s Eras tour. On investment, the sharp pick-up in activity has been long awaited and reflects not only clear confidence in the hotel sector, but more importantly an alignment of pricing between vendors and purchasers. With the recent reduction in base rates, now is the time for investors to step back into the market to take advantage of expected performance and capital growth.’
Frederic Le Fichoux, head of Hotel Transactions, EMEA at Cushman & Wakefield, commented: ‘A relatively high number of hotels are in various stages of divestment across the continent, primarily in the core markets of Western Europe, but we also see a restart of the transaction activity in the Central, Eastern and South Eastern regions. This trend is driven by improved access to financing and attractive yields in the hotel sector, which peaked in 2023 and have since stabilised over the past two quarters.’
Borivoj Vokrinek, head of Hospitality Research & Strategic Advisory, EMEA at Cushman & Wakefield, added: ‘While economic and geopolitical concerns remain, raised capital needs to be deployed and the hotel real estate sector is gaining popularity among investors, being the only asset class in Europe with growing transaction volumes. The increased allocation of capital towards hotels has been driven not only by recent positive performance trends and adjustments in pricing, but also long-term structural changes such as the shift from spending on goods to experiences, and a growing global population with more income and time to travel.’
