European hotel transactions hit a five-year high of €11.6bn in the first six months of 2024, according to new data from Cushman & Wakefield.
In Q2 2024, European hotel transaction volumes hit €5.8bn – almost double the €3bn recorded in the same period last year. Volumes were boosted by several landmark hotel transactions, with luxury and upscale hotels accounting for nearly half of H1 2024 volumes.
The UK, Spain and France were the most active markets, accounting for €7.8bn of transactions – more than two thirds of the European total and 62% higher than in H1 2023.
London registered the highest volume of transactions by city, with Paris, Dublin, Barcelona and Rome completing the top five. Cushman & Wakefield expects transaction volumes to exceed €20bn in 2024, driven by increasing debt liquidity and the strong performance of the hotel sector.
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.”
Frederic Le Fichoux, head of hotel transactions EMEA at Cushman & Wakefield, added: “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.”
Borivoj Vokrinek, head of hospitality research and 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.”
