Cross-Border Capital Reshapes European Hotel Investment

International buyers generated €12.9 billion, or 58.6%, of European hotel investment in 2024. Total transactions reached €22.6 billion in 2025, but that figure was calculated by another company using a different methodology. The data confirm a market recovery but do not prove that the cross-border share continued to rise at the same pace.

European hotels return to mainstream portfolios

Hotels are taking a larger role in the portfolios of international funds, property companies, owner-operators and wealthy private buyers. Investor attention is concentrated on the UK, Spain, Italy, France and Portugal, where established tourism demand is combined with constrained high-quality supply.

Hotels have become an alternative to some office investments as hybrid working has changed occupier demand and increased the cost of repositioning older commercial buildings.

A hotel combines real estate with an operating business. Its income depends on location and property value, but also on occupancy, room rates, management quality, labour expenses, utilities and refurbishment requirements.

Room prices can be changed daily, unlike rents under long office or retail leases. This allows revenue to respond more quickly to inflation and demand but also makes cash flow more sensitive to economic weakness, transport disruption and changing travel patterns, notes Hotel Management Network.

Cross-border transactions reached €12.9 billion

European hotel investment totalled €21.9 billion in 2024, the highest level since 2019. Volume increased by 47.6% from 2023 and was 8.2% above the previous ten-year annual average.

International buyers accounted for €12.9 billion, or 58.6%, of the total. Cross-border volume increased by 81.4% year on year and stood 13.8% above its ten-year average.

Five leading US private-capital investors — Blackstone, KKR, Baupost Group, Starwood Capital and Oaktree — participated in transactions worth €5.9 billion. Their combined activity represented almost 46% of cross-border volume.

Private buyers, owner-operators and non-traded real estate investment trusts generated €5.45 billion of transactions. Their volume increased by 18.1% year on year and by 39.6% relative to the ten-year average, according to the Savills review.

Transactions rose to €22.6 billion in 2025

A separate dataset valued European hotel transactions at €22.6 billion in 2025. Within that methodology, volume increased by 30%, or €5.2 billion. It was the third-highest annual result recorded and the strongest since 2019.

A total of 461 deals covered 725 hotels and more than 107,000 rooms. Single-asset transactions reached a record €15.6 billion and represented almost 70% of the market. Volume increased by 48% from 2024 and exceeded the 2019 result by 29%.

Portfolio transactions totalled €7 billion, an increase of 3%. The average price per hotel rose by 7% to €31.1 million, while the average price per room declined by 2% to €210,000.

Owner-operators were the largest net buyers, with acquisitions exceeding disposals by €1.5 billion. High-net-worth individuals recorded a positive balance of €1.2 billion and increased buying activity by 273%. Private-equity transaction activity declined by 39%, according to HVS.

International capital moved in different directions

The 2025 figures do not show uniform growth across all foreign-investor categories. European investors generated 81% of single-asset activity, compared with 79% in 2024, and recorded net acquisitions of €2.2 billion.

North American investors represented 6% of single-asset transaction volume but sold €205 million more than they acquired. Asian buyers were also net sellers, with a negative balance of €468 million.

Middle Eastern acquisitions of individual hotels increased by 254% to €540 million.

Portfolio activity produced a different result. European investors acquired €5.8 billion and sold €5.7 billion, leaving their balance close to neutral. North American investors were the largest net portfolio buyers, with net acquisitions of €599 million.

Cross-border capital therefore remained active, but its direction depended on investor origin and transaction type.

Different estimates cannot form a single series

The two advisory firms report materially different totals even for the same period. One valued European hotel investment at €21.9 billion in 2024, while the other reported €17.4 billion.

The gap may reflect geographic coverage, minimum deal sizes and the treatment of land, conversions, corporate acquisitions and portfolios.

It would therefore be misleading to calculate ordinary annual growth from €21.9 billion in 2024 to €22.6 billion in 2025. The comparable 2025 increase is 30% because it is measured against the €17.4 billion total produced under the same methodology.

Spain attracted €4.275 billion into hotels

Spain was one of Europe’s largest hotel markets in 2025, attracting €4.275 billion, the country’s second-highest annual result.

The figures covered 194 assets, including operating hotels, buildings for conversion and development land. Transactions involving 159 operating hotels and 21,767 rooms generated €3.986 billion, an increase of 30% from 2024.

Nineteen conversion transactions accounted for almost €160 million, while 16 land deals generated approximately €130 million.

Resort assets attracted €2.336 billion, or 55% of the national total. More urban assets changed hands, however, with 112 transactions compared with 82 resort deals. The average resort transaction was approximately €28 million, against €17 million in the urban segment.

Domestic buyers led the Spanish market. They generated 72% of transactions and 63% of investment volume, equivalent to €2.673 billion. International capital accounted for 37%, or €1.602 billion. French funds were the largest foreign group, investing €345 million, according to Colliers.

The Canary Islands and Barcelona captured 41%

The Canary Islands remained Spain’s leading hotel investment destination for a third year. Seventeen transactions generated €1.039 billion, or 24% of national volume.

Barcelona attracted €712 million through 20 deals and represented another 17%. Together, the city and the Canary Islands received €1.751 billion, equivalent to 41% of Spanish hotel investment.

Madrid recorded 24 transactions worth €376 million. Its 9% share reflected the limited availability of major assets rather than weak demand.

Secondary destinations captured 32% of investment. Cádiz attracted €234 million, Valencia €174 million and Seville €164 million.

The largest deal was the €430 million sale of the Mare Nostrum Resort in Tenerife. The 1,037-room complex became Spain’s largest recorded transaction involving a single hotel asset.

Southern Europe’s €27.4 billion total covers all property

Combined commercial property investment across Spain, Italy and Portugal exceeded €27.4 billion in 2025, rising by 19%.

The figure does not represent hotel investment alone. It includes retail, offices, logistics, residential and other investment property.

Hospitality and retail were among the leading growth drivers, supported by tourism demand and limited availability of high-quality assets. Spain attracted €12.1 billion across all property sectors, an increase of 16% from 2024, according to Cushman & Wakefield.

The distinction is material: describing the €27.4 billion figure as Southern European hotel investment would overstate the market.

Barcelona joined London at the top in 2026

Barcelona moved from fifth place to join London as Europe’s leading city for hotel investment. Madrid ranked third, while Paris and Milan shared fourth place.

Spain remained the leading country for expected hotel-market fundamentals, followed by Italy and the UK. France and Portugal shared fourth place. Iberia and Italy together represented more than 40% of intended capital deployment.

More than 90% of respondents planned to maintain or increase hotel allocations in 2026. A large increase was planned by 31%, compared with 26% a year earlier.

Luxury hotels were preferred by 53% of respondents. The share favouring globally recognised brands also reached 53%, up from 43% in 2025. Interest in opportunistic strategies increased to 25% from 15%.

The survey was conducted in February and March 2026 among more than 70 European hotel investors, CBRE reported.

Why hotels attract investment

Hotels provide exposure to both property income and operating performance. When demand is strong, owners can adjust room prices more quickly than landlords bound by long leases.

Development restrictions in historic centres, resort locations and coastal areas can support the value of existing properties. Investors may also create value through refurbishment, a new management agreement, brand affiliation, additional rooms, restaurants or meeting facilities.

A key operating measure is revenue per available room. It is calculated by dividing room revenue by the number of rooms available for sale and reflects both occupancy and the average rate achieved.

Pricing flexibility does not eliminate risk. A decline in travel demand can quickly reduce occupancy and revenue, while many labour, maintenance and debt-service costs remain.

Cross-border transactions create additional risks

International buyers face currency movements, tax differences, licensing requirements, planning restrictions and employment rules.

Refurbishment, energy upgrades and compliance with international brand standards can require substantial additional capital. In older hotels, these costs may represent a significant share of the acquisition price.

Southern European resorts are exposed to seasonality, airline capacity, extreme heat, water scarcity and environmental risks. London provides liquidity and diversified demand but has a high entry price, expensive labour and potentially large refurbishment requirements.

A global brand can widen distribution and loyalty-programme access, but it also creates management, reservation and marketing fees. Brand recognition does not guarantee an adequate return from an individual property.

Frequently Asked Questions

What is cross-border hotel investment?

It is the acquisition of a hotel, ownership interest or hotel portfolio by a buyer based in another country.

How large is the European hotel transaction market?

One dataset valued the market at €22.6 billion in 2025. Another estimated €21.9 billion in 2024, but the totals cannot be compared directly because the methodologies differ.

What is the international investor share?

Cross-border buyers accounted for €12.9 billion, or 58.6%, of European hotel investment in 2024 under the Savills methodology. The reviewed sources do not provide a directly comparable share for 2025.

Did foreign buyers dominate Spain?

No. Domestic buyers generated 63% of Spanish hotel investment in 2025, while international investors accounted for 37%.

Which cities lead in 2026?

Barcelona and London share first place for hotel investment appeal, followed by Madrid, Paris and Milan.

What are the main hotel investment risks?

They include lower occupancy, seasonality, labour and energy costs, refurbishment requirements, financing expenses, currency movements and dependence on management quality.

As International Investment experts report, hotels have returned to a significant position in global property portfolios, but claims of continuously accelerating cross-border capital require caution. The 58.6% share is confirmed for 2024, while capital moved in different directions during 2025 depending on investor origin and transaction type. European investors dominated single-asset activity, North American buyers targeted portfolios, and domestic capital led the Spanish market. As competition increases in London, Barcelona and leading resort locations, acquisition pricing, refurbishment costs and operating quality become more important than headline tourism growth.