The hotel investment market in Germany is emerging from the trough and is once again looking ahead with confidence. Hotel operators are continuing to grow even during the crisis, through acquisitions and conversions. During this year's Expo Real, the hotel industry was the only asset class that was in a good mood. The HospitalityInside INVESTMENT Barometer 2024 saw no more negative slumps in participants' assessments after the end of Expo Real - which is regarded as a barometer of sentiment in the property sector - and cautious optimism prevailed.
Indices reflect market movements
The four long-term indices (Business, Expectation, Development and Operation Index) are no longer homogeneous this autumn. The Development Index is again bringing up the rear. However, more than half of those surveyed predict good or very good business for their companies over the next six months. The Operation Index puts the brakes on optimism: "How long will the current level of demand remain stable?" asked almost half of the survey participants.
The transaction knot loosens in 2025
2023 had already been a weak year for transactions in Europe, coupled with high hopes for a turnaround in the hotel investment market by the end of this year (2024). And 40 percent of respondents only sensed a comeback in 2025.
The latest Barometer analysis proves the cautious right: 43.18 percent of participants see a slight increase in transaction volumes to 12-15 billion euros in 2024 (up from around 10.7 billion euros in 2023). And 18.8 percent believe that 15-20 billion is even achievable in the current year. This raises expectations for 2025: over 77 percent believe that transactions will increase slightly or significantly (50 and 27.27 percent respectively).
When asked in which European countries the transaction volume will increase most significantly, there are three countries that are almost on a par: Germany (in the lead with 45.51 percent), followed by the UK (44.19 percent) and Italy (44.19 percent).
Institutional investors are looking for investments again
"Investment activity on the European hotel markets is starting to pick up again after a period of stagnation, albeit at a low level. In 2025, the positive trend should indeed consolidate - institutional capital in particular is once again increasingly looking for investment opportunities in Europe," says Andreas Löcher, Head of Investment Management Operational, emphasising the current development.
According to the hotel experts surveyed, Germany, the UK, Italy and the Nordics in particular are likely to achieve the most significant growth rates in hotel transactions next year, coming from a relatively low level. "More than 80 percent of the participants in the survey are convinced that the European hotel investment markets will pick up in 2025. An even 'significant increase' in hotel transactions compared to 2024 is expected by 30 percent of respondents," Löcher is also pleased to report. / kn
The full analysis of the HospitalityInside Investment BAROMETER 2024 can be found in the attached PDF.
