Savills ' latest report on European hotel investment doesn't just say the market is recovering. More importantly, it says the game has changed. According to the trade press, volumes are rising, confidence is returning, but selectivity has become absolute. In short, 2026 won't be an easy year; it will be a year for investors who can execute.
Summary
A market in recovery, but with conditions
Savills confirms a gradual market recovery. In 2025, hotel investment volumes in Europe reached approximately €23.6 billion, up around 4.8% year-on-year. At the same time, operating performance remains positive, with RevPAR increasing compared to 2024 and now above 2019 levels on an adjusted basis.
But what I take away most is the shift in dynamics. Savills describes a two-speed market: real estate still recovering, but hotel performance already well into its cycle. As a result, growth is slowing, costs are rising, and the margin for error is shrinking.
In other words, hotel investment no longer rewards inaction. It rewards the ability to select, structure and operate.
Why execution is becoming the real lever of performance
This is the central point of the report. For years, value creation relied heavily on the timing of acquisitions. Today, this lever is no longer sufficient.
What I see in Savills' analysis is a shift towards operational aspects. The choice of operator, the quality of revenue management, cost control, and contractual flexibility are becoming crucial.
In a context where the cost of debt remains high and spreads are compressing, operational performance becomes the main driver of returns.
An increasingly selective market
Another key lesson: not all assets will benefit from the recovery.
Prime and ultra-luxury assets continue to outperform, driven by their scarcity and ability to maintain high prices. Conversely, secondary or poorly positioned assets are likely to remain under pressure.
Resort destinations, particularly in Southern Europe, remain especially attractive. What I'm seeing is a concentration of capital on the most secure and distinctive assets.
Germany, a market under pressure but strategic
Savills also identifies contrarian opportunities. Germany, in particular, remains behind its pre-Covid levels, both in operational performance and investment volume.
But that's precisely what makes it a market to watch. For investors capable of supporting a transformation of business models, particularly towards more flexible structures, the potential is there.
This type of market requires capital, time, and genuine expertise. But it's often where the best opportunities arise.
Operator models need to be reinvented
The report goes further by questioning certain industry models. The proliferation of brands and asset-light strategies are now revealing some limitations, particularly regarding capital allocation.
What I find interesting is the idea that new hybrid models could emerge, combining exploitation, investment and more structured partnerships with institutional investors.
We are not yet in a rupture, but clearly in a phase of adjustment.
What I take away for tourism professionals
European hotel investment rebounded in 2025, with a return of both volume and liquidity. However, the market is becoming significantly more demanding. Operational performance is taking precedence over the simple logic of acquisition. Prime and ultra-luxury assets continue to attract the majority of interest. Certain markets under pressure, such as Germany, could offer targeted opportunities. Finally, deal structuring and operating models will become key drivers of differentiation.
Why 2026 marks a real turning point
What I see in this report is a fairly clear evolution: hotel investment is becoming an execution-based business.
Reading the cycle is no longer enough. You need to know how to operate, structure, and make informed decisions. Those who continue to focus solely on entry prices risk missing the mark. Those who understand the entire value chain will have a real advantage.
And for tourism professionals, this is an important signal: the quality of assets, partners and operations will once again become central to value creation.
Sources
ttps://latribunedelhotellerie.com/investment-hotelier-europe-2026-savills-outlook/
https://pdf.savills.com/documents/savills-european-hotel-trends-outlook-2026.pdf
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