The European hotel investment market experienced a remarkable turnaround in 2024, with transaction volumes soaring by 62% compared to the previous year, reaching €17.4 billion. This marks the highest level of hotel transactions since 2019, according to the HVS European Hotel Transaction Report from global hotel consultancy HVS London and its brokerage division, HVS Hodges Ward Elliott.
The surge in transactions was primarily driven by declining interest rates and strong private equity investment, particularly in large portfolio deals. The average price for European hotels increased to €29 million, reflecting a 5% rise from 2023. Additionally, the price per room saw a 9% increase, reaching €215,300, a figure 5% higher than in 2019.
The UK led the market, accounting for 36% of all hotel transactions, followed by Spain (15%), France (12%), and Italy and Germany at 6% each. London, Paris, and Madrid emerged as the top cities for hotel deals. London, in particular, stood out with €3 billion in transactions, a total that matched the combined volume of the next five most active cities, solidifying its status as Europe’s top investment destination.
In terms of investor activity, private equity firms were the most dominant players in 2024, with nearly €8.6 billion in transactions, marking a 300% increase from 2023. This was followed by owner-operators, who dealt with €7.8 billion in assets, reflecting a 90% rise compared to the previous year.
The volume of single asset transactions also saw strong growth, reaching €10.5 billion. A key driver for this increase was the strong performance of the hotel market and reduced interest rates from European central banks. Paris led the way in single asset transactions, with a total of €1.4 billion, bolstered by the 2024 Paris Olympics. Notable deals in the French capital included high-profile properties such as the Mandarin Oriental, Pullman Tour Eiffel, and Hilton Opera.
