European hotel investment surges 62% to highest level since 2019- HVS London

EUROPE – The European hotel investment market experienced a 62% surge in transaction volumes last year, marking the highest level since 2019, according to the latest HVS European Hotel Transaction Report from HVS London and its brokerage arm, HVS Hodges Ward Elliott.

The surge in European hotel transactions in 2024 was driven by declining interest rates and robust private equity investments, particularly in large portfolio deals.

This led to a total transaction volume of €17.4 billion (US$18.88 billion), marking a €6.7 billion (US$7.27 billion) increase compared to 2023.

On average, European hotels sold for €29 million (US$31.47 million), a 5% rise from the previous year. The average price per room increased by 9% to €215,300 (US$233,600), approximately 5% higher than in 2019.

The UK led the market, accounting for 36% of deals, followed by Spain at 15%, France at 12%, and both Italy and Germany at 6%. London, Paris, and Madrid were the top-performing cities in terms of transactions.

London remained Europe’s most transacted city, recording €3 billion (US$3.26 billion) in deals, equaling the combined total of the next five most active cities.

This was largely driven by major portfolio transactions, reinforcing its status as a key global investment hub, according to report co-author Gauthier Champlong, an associate at HVS Hodges Ward Elliott.

Private equity investors were the most active market participants in 2024, completing transactions worth nearly €8.6 billion (US$9.33 billion), a 300% surge from 2023.

Owner-operators followed closely with €7.8 billion (US$8.47 billion) in transactions, reflecting a 90% increase over the previous year.

Single asset transactions totaled €10.5 billion (US$11.39 billion), driven by interest rate reductions from European central banks and strong hotel market performance, which heightened investor interest.

Paris led in single asset transactions, with €1.4 billion (US$1.52 billion) in volume, significantly influenced by the Olympics. Notable deals in the French capital included the Mandarin Oriental, Pullman Tour Eiffel, and Hilton Opera.

London ranked second in single asset transaction volume, with €1 billion (US$1.09 billion) in deals, followed by Madrid, Venice, and Athens.

Key London transactions included the Six Senses in Bayswater and The Standard in Kings Cross.

Portfolio transaction volume surged to €6.8 billion (US$7.38 billion) in 2024, marking a substantial increase from the previous year.

Approximately half of these deals occurred in secondary cities, particularly in Spain, France, Germany, and Belgium.

London led portfolio transactions with €1.9 billion (US$2.06 billion), followed by Amsterdam at €240 million (US$260 million).

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