Market Beat Europe - H1 2026

INVESTMENT ACTIVITY

Hotel investment activity in Europe remained resilient in H1 2026, reaching €11.7 billion, with volumes 19.5% above the 10-year average, despite a moderate year-on-year decline (-9.5%). Transaction activity was supported by landmark single-asset deals, including the Pullman Paris Tour Eiffel, The Westminster Curio Collection London and the Park Hyatt Vienna, alongside continued portfolio activity in key markets such as the UK and Spain. While fewer assets transacted overall, transactions above €100 million increased by 30% YoY, highlighting continued investor demand for prime hotel assets. APAC and MEA investors remained particularly active, with investment volumes increasing by 86% and 31% respectively, helping to drive cross-border activity across Europe's gateway markets.

PRICING

Following the strong investment momentum recorded in 2025, hotel yields remained broadly stable in H1 2026, supported by sustained investor appetite for the hotel sector. However, the resurgence of inflation during the first half of the year, resulting in higher financing costs, may limit further yield compression for the remainder of 2026. The average price per room increased by 9% year-on-year to €228,416. Private investors continued to dominate transaction activity, representing 54% of acquisitions and 46% of disposals. Their share of selling activity increased by 8.4 percentage points compared with the previous year. Institutional investors accounted for 37% of investment volume on the buy side and 38% of disposals on the sell side, although their share declined by 8.8 percentage points year-on-year.

SUPPLY

Hotel supply in Europe continued to grow in H1 2026 (+2.9% vs. H1 2025), especially in Southern Europe, where room inventory increased by more than 5%. At the country level, Poland, Italy and Austria recorded notable increases in supply. The pace of supply growth remained uneven across the region, reflecting varying development pipelines and development constraints, with very limited pipeline across several markets such as Amsterdam, Barcelona, Prague and Paris.

PERFORMANCE

In H1 2026, Europe’s average RevPAR reached €101, a 3% increase year-on-year. This growth was driven by a 2.2% rise in ADR and a 0.7% increase in occupancy. Eastern Europe recorded the strongest performance growth, with RevPAR increasing by 6% year-on-year, followed by Southern Europe. Some of the largest year-on-year increases in RevPAR, compared to H1 2025, were recorded in Milan (+24%), benefiting from demand associated with the 2026 Winter Olympics, and Budapest (+15%).