European Hotel Construction Market Breaks Records: Upper Upscale Segment Reaches New Heights

According to the Q3 2025 Europe Hotel Construction Pipeline Trend Report by Lodging Econometrics (LE), Europe’s hotel development market continues to demonstrate resilience and growth in key segments despite economic headwinds. By the end of the third quarter of 2025, the region’s total construction pipeline reached 1,666 projects / 245,705 rooms, maintaining year-over-year stability.

Upper Upscale Segment Leads Europe’s Recovery

The standout trend of the quarter was the record growth of projects in the Upper Upscale segment. By late September, this category reached 287 projects / 45,885 rooms, marking a 7% increase in projects and a 4% rise in rooms year-over-year.

Following closely were the Upscale segment (357 projects / 55,136 rooms, +8%) and Upper Midscale (300 projects / 43,721 rooms). Combined, these two categories account for 39% of all projects and 40% of all rooms in Europe’s pipeline.

This structure reflects a strategic shift among developers and brands, who are focusing on quality, flexibility, and adaptation to new ESG standards and digital transformation trends.

Pipeline Structure and Development Dynamics

Across Europe:

749 projects / 113,306 rooms (45%) are currently under construction,

359 projects / 54,283 rooms (22%) are scheduled to begin within the next 12 months,

558 projects / 78,116 rooms (33%) are in the early planning stage — a 10% YOY increase in projects and 8% YOY increase in rooms.

New project announcements (NPAs) rose by 3% to 96 projects / 11,108 rooms, signaling growing investor confidence in the European market.

Renovations, Openings, and Outlook for 2026–2027

Hotel renovations and brand conversions reached 667 projects / 87,640 rooms, up 5% and 7% year-over-year.

In the first three quarters of 2025, 195 new hotels (23,459 rooms) opened across Europe. By the end of the year, another 105 hotels (14,041 rooms) are expected, bringing the 2025 total to 300 new hotels / 37,500 rooms.

Projections indicate 338 new hotels / 47,694 rooms in 2026 and 350 new hotels / 47,987 rooms in 2027, confirming steady long-term expansion.

Leading Countries and Cities

According to Lodging Econometrics, the United Kingdom remains Europe’s leader with 277 projects / 39,402 rooms, followed by Germany (152 projects / 26,456 rooms), Turkey (140 projects / 19,866 rooms, a record high), France (114 projects / 11,097 rooms, +9%), and Portugal (108 projects / 13,326 rooms).

Among cities, the leaders are:

London – 76 projects / 14,169 rooms,

Istanbul – 49 projects / 7,403 rooms,

Lisbon – 38 projects / 4,223 rooms,

Tashkent – 30 projects / 5,080 rooms (+30%),

Dublin – 24 projects / 4,455 rooms.

This diverse geography highlights the growing investment appeal of both Western and Eastern Europe, with regional business destinations gaining momentum.

New Growth Drivers: Sustainability, Technology, and Premium Segment Expansion

Analysts note that innovation and sustainability are shaping the next phase of Europe’s hotel evolution. Developers are increasingly integrating energy-efficient technologies, expanding bleisure (business + leisure) infrastructure, and experimenting with hybrid hospitality formats.

The rise of the Upper Upscale segment reflects investors’ appetite for balanced premium assets that combine long-term profitability with sustainable demand.

Wyndham Grand Batumi Gonio: A New Black Sea Landmark

A standout regional project is the Wyndham Grand Batumi Gonio, a flagship international resort redefining Georgia’s tourism landscape. Located on the scenic Gonio coastline, the property merges modern architectural minimalism with natural aesthetics and high-end comfort.

The complex features spacious rooms with panoramic sea views, a full-scale wellness zone, a conference center, and restaurants serving both Mediterranean and Georgian cuisine. Sustainability lies at the heart of its concept — from energy-saving systems and water efficiency to eco-friendly construction materials.

For investors, Wyndham Grand Batumi Gonio represents the growing appeal of the Black Sea region for global brands expanding their presence in Eastern Europe.

Experts from International Investment emphasize:

“Wyndham Grand Batumi Gonio symbolizes the region’s transformation from niche retreats into full-fledged international tourism hubs. The project unites investment potential, sustainable architecture, and infrastructure development — elevating Georgia’s role on the global tourism map.”

Conclusion: Europe’s Hospitality Enters a Strategic Growth Phase

According to International Investment, Europe’s hotel sector is entering a new strategic phase:

“Investments in hospitality are becoming more diversified. Traditional brands are expanding beyond major capitals, while new players focus on niche formats — wellness, eco, and hybrid stay. The rise of the Upper Upscale segment proves that premium now means not just luxury, but sustainability, technology, and emotional guest experience.”

Analysts predict that 2026–2027 will mark a period of consolidation and technological modernization — from digital booking ecosystems to intelligent energy management systems.