Discover investment trends, market dynamics, and sustainability practices shaping real estate and hospitality investments
Cushman & Wakefield’s fourth Hotel Investor Compass survey gathers insights from major investors active across the region, who have collectively deployed over €16 billion in hotel assets since 2019.
The 2025 edition highlights the Iberian Peninsula, Italy, and France as Europe’s most in-demand hotel investment destinations. Southern European gateway cities remain a strong focus, with Madrid, Barcelona, and Rome identified as the most attractive for investment.
The survey reflects strong investor confidence, with 70% of respondents planning to be net buyers in 2025, driven by a declining cost of capital and rising demand. The most significant hotel price increases are expected in Italy and the Iberian Peninsula, followed by the UK & Ireland and France.
Investor commitment remains high, with 94% planning to maintain or increase capital allocation to European hotels. Confidence in the sector continues to grow, with the share of investors looking to retain or expand their portfolios rising by 15 percentage points from the previous year.
Investor return on equity requirements have dropped by two percentage points to 13.6%, reinforcing optimism and supporting further value growth. Value-add opportunities remain the most sought-after, while interest in core and core-plus investments is also rising. More than half (55%) of investors intend to be net buyers in 2025, up from 47% in 2024.
Hotels with strong ESG credentials are expected to command a “green premium,” with investors willing to pay nearly 5% more for properties achieving top ESG certifications such as BREEAM Outstanding or LEED Platinum.
Concerns over financing and yields have eased compared to 2024, aided by a more favourable interest rate environment. However, rising construction costs remain the biggest challenge, cited by 65% of investors, followed by geopolitical and macroeconomic risks (44%).
For more details, please contact Borivoj Vokrinek.
