September 29, 2025

Hotel Market Beat 2025 H1 - Germany

The German hotel investment market showed a remarkable increase in transaction volume in H1 2025 compared to H1 2024, nearly reaching the total annual volume of 2024. However, the market is still considerably behind the pre-COVID levels.

By Christine Mayer and Christine Folz

Germany

INVESTMENT ACTIVITY

The investment activity in H1 2025 was driven by single-asset transactions, such as the Mandarin Oriental in Munich. This deal has set a new price-per-room record, reportedly amounting to approximately €2M per room. Overall, more than half of the transaction volume during H1 2025 was concentrated in the top-5 cities.

PRIME YIELDS

In the first half of 2025, prime yields remained mostly stable, albeit some high-profile transactions of trophy assets commanded sharper yields. The investor appetite for hotel assets has increased due to the stability of the hospitality market, with resilient demand and sound development of KPIs.

SUPPLY & DEMAND

Germany’s hotel market is expanding in 2025, with over 15,000 new rooms expected to open by the end of the year, within the major hotel brands alone. There were also several major re-openings across all segments, such as Radisson Collection Berlin (427 rooms), Kimpton Frankfurt (155) or Motel One Munich Hauptbahnhof (386). Furthermore, a competitive dynamic is unfolding, marked by M&As, brand changes, and strategic partnerships.

PERFORMANCE

In 2024, RevPAR in Germany grew impressively by 6.8% YoY, but this slightly reversed in H1 2025. RevPAR declined by 1.0% due to a 1.8% YoY drop in occupancy. However, performance among the Top-5 cities varied significantly, with Munich recording a substantial growth of +19.2%, while RevPAR in Düsseldorf sharply declined (-22.2%), attributable to the trade fair cycle.

Markets & Performance Europe Germany