Europe Surges Ahead: Why Hotel Construction Is Growing Here While Other Regions Hit Pause

Europe — The Only Region with Growth in Hotel Pipeline by Q3 2025

According to CoStar, by the end of Q3 2025, Europe emerged as the only region in the world where both active hotel construction and total development pipeline expanded. Rooms under construction increased by 5.2% to 171,589, while total rooms under contract rose to 428,345 — a 3.7% year-on-year increase. This signals a structural recovery and renewed investor confidence in Europe’s hospitality infrastructure.

Who Leads the European Market and What Drives the Numbers

Leading countries in hotel construction:

United Kingdom – 24,540 rooms

Germany – 22,622 rooms

Despite an 18.5% decline in the final planning phase, early-stage planning grew by 14.2%, indicating that developers are shifting toward future-oriented project preparation for openings expected between 2026–2028. Key growth factors include post-pandemic tourism restructuring, preparations for major international events, and a renewed focus on sustainable and high-value travel.

Asia-Pacific: Still the Largest, but Slowing Down

The Asia-Pacific region remains the global leader by volume but has cooled in momentum:

Under construction: 492,663 rooms (–3.2% YoY)

Total pipeline: 951,020 rooms (–0.3%)

Major markets include China (280,577), India (41,711), and Vietnam (39,078). While the planning stage grew 6.6%, final planning fell 22.6%, reflecting a more cautious investment climate amid macroeconomic uncertainty and regulatory changes.

Middle East & Africa: A Temporary Slowdown, Long-Term Confidence

Total pipeline: 213,776 rooms (–5.6%)

Under construction: 99,895 rooms (–9.4%)

Final planning: –37.3%

However, early planning increased by 10.9%, showing long-term investor confidence. Saudi Arabia (44,771 rooms) and the UAE (14,685) continue to anchor development, driven by tourism diversification initiatives such as Saudi Vision 2030.

The Americas: Mixed Trends and the Cost of Capital

Total pipeline: 873,725 rooms (–3.1%)

Under construction: 190,842 rooms (–8.8%)

Final planning: –4.1%; planning: –0.8%

The U.S. leads with 138,922 rooms under construction, followed by Mexico (14,290), Canada (8,988), and Brazil (5,481). Rising financing costs, material prices, and labor shortages are key challenges, though markets such as Mexico and the U.S. Sun Belt continue to expand their branded portfolios.

Why Europe Grows While Others Slow Down

Shift toward “quality tourism.” Cities are redesigning their tourism models, investing in assets with high average daily rates (ADR) and resilient demand.
Event-driven projects. Conferences, festivals, and sports events ensure predictable occupancy cycles.
Adaptive reuse and redevelopment. Converting existing assets is faster and less risky than greenfield development.
Access to capital and global partnerships. European developers benefit from established financing institutions and flexible management models such as franchise and hybrid operations.

International Hotel Brands Expand in Georgia

Georgia is rapidly becoming a strategic hub for global hospitality operators. Analysts highlight the country’s shortage of premium and luxury accommodations under international management.
Major hotel groups — Hilton, Marriott, and Wyndham — have announced expansion plans, signaling a shift toward global brand presence, improved service standards, and new tourism infrastructure across the region.

Wyndham Grand Batumi Gonio: Georgia’s Flagship Branded Project

Wyndham Grand Batumi Gonio stands out as one of Georgia’s most ambitious hospitality investments:

It is the country’s first resort under the Wyndham Grand brand (part of Wyndham Hotels & Resorts), offering an Ultra All Inclusive concept.
Located in Gonio, near Batumi — a scenic and ecologically clean area of the Black Sea coast — the project combines hotel, villas, and branded residences.
Facilities include a spa & wellness center, restaurants, family and adults-only zones, and recreational areas.
The development demonstrates how Georgia is transitioning from a mid-range tourism market to a premium branded hospitality destination, setting new benchmarks for the region.

Why This Matters for the Industry and Investors

The arrival of international brands enhances traveler confidence, as recognizable hotel names strongly influence destination choice.
Branded hotels raise operational and service standards, elevating the overall market reputation.
For investors, this opens new niches: branded residences, family clubs, and high-yield leisure projects. Wyndham Grand Batumi Gonio serves as a blueprint for sustainable branded development in the region.
Regions with active brand growth typically achieve higher ADRs and occupancy rates, boosting long-term returns.

What to Expect in 2026

Europe will lead new openings. Projects approved in 2024–2025 will move into construction and pre-opening stages.

EMEA shows two-speed growth. Europe accelerates while the Middle East builds long-term pipelines.

APAC becomes selective. Developers prioritize stability over scale.

The Americas focus on efficiency. More adaptive reuse and strict ROI-driven planning dominate.

Opportunities for Investors and Operators

Urban business hubs in Europe offer strong potential for upper midscale and upscale hotels catering to mixed MICE and bleisure demand.
Resort markets with year-round economies — wellness, gastronomy, and sports tourism — show resilience.
Adaptive reuse of offices or heritage buildings reduces CapEx and accelerates returns.
Operational upgrades, energy efficiency, and dynamic revenue management models become key profit levers.

Risks to Watch

Rising capital costs extend payback periods — precise ADR/RevPAR planning is crucial.

Construction inflation and supply chain issues require strong contingencies.

ESG and regulatory compliance tighten — energy, noise, and heritage standards directly affect costs.

Seasonality and workforce shortages highlight the need for flexible staffing models.

Europe Becomes the Global Hotspot for Hotel Investment

Q3 2025 data reveal a global rebalancing of hotel investment: while growth slows in APAC, the Middle East, and the Americas, Europe stands out with consistent expansion in construction and pipeline volume.

By 2026, the region is expected to lead in new openings, while others focus on selectivity and operational efficiency. For developers and operators, Europe — along with Georgia’s emerging branded market — represents a rare window of opportunity in a shifting global hospitality landscape.
Wyndham Grand Batumi Gonio

Georgia: The New Frontier for International Hotel Brands

As hotel construction slows elsewhere, Georgia is gaining momentum. The entry of premium global brands and the launch of projects like Wyndham Grand Batumi Gonio signal the country’s readiness for a new level of hospitality excellence — an important milestone for operators, investors, and travelers alike.