European Hotel Investors Compass 2024

VaselineMay 10, 2024

0 1 minute read

Investment trends, market dynamics and sustainability practices shaping real estate and hospitality investments

Cushman & Wakefield’s Hotel Investor Compass survey looks at the views of 60 major investors active in the region, who have collectively invested €18 billion between 2019 and 2023 in hotels and have an average fund size of €233 million available for investment hotels in 2024.

The research shows that investor demand is moving strongly towards markets in southern Europe, the Iberian Peninsula and Italy achieving the highest investment interest scores. The increased interest of Spain and Portugal is particularly significant, registering an increase of 17% compared to 2022.

Madrid and Barcelona top the list of cities where investment interest is strongest, followed by Paris and Rome. Contributing to this, Barcelona saw the largest increase in attractiveness compared to 2022 (+10%), while Lisbon saw an 8% increase and Madrid a 7% increase.

A substantial 78% of surveyed investors plan to deploy the same or more capital to European hotels this year compared to pre-pandemic 2019 levels. Value-add opportunities are being aggressively targeted, with 92% of respondents focusing on this strategy to acquire assets that require repositioning or moderate capital expenditures. Almost half of investors plan to be net buyers in 2024.

The survey findings also indicate the premium investors expect to pay for hotels with superior ESG credentials. On average, respondents indicated they expect to pay a 5.5% premium over non-certified properties for those achieving the highest level of ESG certification, such as BREEAM Outstanding or LEED Platinum ratings.

There is a strong attraction to investment in the luxury hotel segments, including luxury and upper upscale, which are seeing the largest increases in investor demand compared to 2019, 53% and 46% respectively.

When asked about the level of attractiveness of accommodation types, investors indicated that the most attractive were resorts (74%) and serviced apartments (59%).