European hotel deal volumes surge to five-year high, interest in Czech hotel market remains high

• European hotel transaction volumes amounted to more than €11.6 billion in H1 2024, the highest six-month volume since 2019

• London remains the leading destination for investor activity

• Volumes are projected to surpass the €20 billion threshold in 2024, supported by increasing debt liquidity and strong hotel performance 

• Interest in Prague continues to be strong, with the highest RevPar and GOP in the CEE region.

European hotel transactions reached a five-year high in the first half of 2024, according to new data from Cushman & Wakefield. Transactions in the first half of the year grew to over €11.6 billion , the highest six-month volume since 2019.

In the second quarter, European hotel transaction volumes hit €5.8 billion, nearly double the level reached at the same time last year (€3.0 billion in Q2 2023). Volumes were boosted by several landmark hotel transactions, including the sales of the Pullman Paris Tour Eiffel, the Hilton Paris Opera, Six Senses London, the Shelbourne Hotel Dublin, and the Park Hyatt Zürich. Overall, luxury hotels represented nearly half of H1 2024 volumes.

Frederic Le Fichoux, Head of Hotel Transactions, EMEA at Cushman & Wakefield, said: “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. Coupled with robust income growth, this has created a favourable environment for both sellers and buyers to engage in transactions.”

The UK, Spain, and France were the most active markets, accounting for €7.8 billion of transactions – over two-thirds of the European total, and 62% more than H1 2023. London registered the highest volume of 

transactions by city, with Paris, Dublin, Barcelona, and Rome completing the top five. Looking ahead, volumes are projected to exceed €20 billion in 2024, 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.”

Borivoj Vokrinek, Head of Hospitality Research & Strategic Advisory, EMEA at Cushman & Wakefield, said: “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.”

Czech Republic Hotel Market Summary

In the Czech Republic, hotel investment reached EUR 35.2*  million in H1 2024, which is 25% below H1 2023 and 92% below H1 2019. Despite the overall low transaction volumes, interest in Prague remains high, supported by improved financing due to stabilized interest rates. The low transaction volumes are primarily attributed to a gap between seller and buyer pricing expectations.

In H1 2024, two properties were transacted, totalling 197 keys. The average deal size was EUR 18 million, equating to EUR 180,000 per room. These transactions included one property in Prague (Hotel Cechie, part of the Novy Karlin acquisition) and one in Spindleruv Mlyn. Both properties were categorized as upper-midscale, and all buyers were from the Czech Republic. However, Prague continues to attract international investors.

Looking ahead, more activity is expected with large properties like Hilton and Four Seasons on the market. Yields in Prague stabilized and range between 6.0%-7.0% depending on income type, location and hotel status. Performance recovery in Prague showed significant improvement, with RevPAR growth of 14.8% compared to H1 2023, leading the CEE region. Occupancy rates improved by over 5 percentage points to 69.5%. ADR growth was 5,8% compared to H1 2023.  Hotel profitability in Prague reached a gross operational profit percentage of 44,1%, the highest in the CEE region. This is result of improving demand, as Prague Airport experienced a 24% increase in passenger numbers in the first half of 2024. Also, the addition of Luxury assets, such as W Hotel Evropa (153 rooms), Fairmont Golden Prague (297 rooms), and U Sixtu Hotel (100 rooms) in 2024-2025, should further drive leisure demand and improve Prague’s image as a luxurious destination.

"Prague hotel market continues to be of a great interest for both international as well constantly increasing domestic investors who are appreciating significant growth in recent performance recovery with being a leading market compared to other CEE capitals as well constantly improving accessibility to debt financing. Together with well optimized and highest GOP margins in the region I am certain we have enough ingredients to witness a significant boost of hotel transactions activity in Prague hotel market in H2 2024 as well as entire 2025," said David Nath, Partner, Head of Hospitality CEE & SEE, Cushman & Wakefield. 

 _{¹ A contingency of 5% is assumed for transactions in the last 12 months, as some deals are revealed with notable delay.
 ² 5% contingency is assumed for transaction volumes in the last 12 months, as some deals are revealed with notable delay.}