Market Beat Germany - H1 2026

INVESTMENT ACTIVITY

During the first six months of 2026, the German hotel investment market generated a transaction volume of approximately € 600 million, reflecting a lower level of activity compared to the corresponding period in 2025 (ca. € 1.1 billion). International investors still accounted for more than half of volume, led by high-net-worth individuals and family offices, followed by institutional investors and hotel operators. The defining event of the half-year, however, was not a single transaction but the break-up of the insolvent REVO Hospitality Group, through which several international hotel groups entered or expanded in the German market for the first time.

PRIME YIELDS

Yield levels have remained broadly stable. Since the end of 2023, prime yields for hotels operated under hotel management agreement (HMA) have remained largely unchanged at around 6.5%. Outside the core segment, however, yields have become increasingly differentiated according to location, asset quality, and risk profile. While prime assets continue to attract strong investor demand, secondary locations require more convincing evidence that operational value creation and CAPEX planning can sustainably support returns.

SUPPLY & DEMAND

As supported by data from the German Federal Statistical Office, hotel supply has recorded a slight decline, suggesting that additional capacity is being surpassed by hotel closures. As a result, competitive pressures remain contained, helping to sustain stable operating metrics and reinforcing the sector's resilience despite ongoing macroeconomic challenges.

PERFORMANCE

Germany recorded broadly stable hotel operating performance in H1 2026 compared to H1 2025. Average occupancy increased slightly to 65% (+1 percentage point year-on-year), while ADR declined to €113 (-1.6% year-on-year). As a result, RevPAR remained essentially unchanged at €74 (+0.1% year-on-year). A stronger performance in August, with RevPAR growth of 4.7%, provides a more positive outlook for H2 2026. Looking ahead, market conditions are expected to strengthen further in 2027 as the return of several major biennial and triennial trade fairs supports increased corporate travel demand and pricing growth across Germany’s key hotel markets.