European hotel market set to strengthen

New HVS report predicts transaction volume recovery expected later this year


By Sarah Todd

30 April 2021

The annual European Hotel Transactions 2020 report has been published by HVS and its brokerage and investment services division HVS Hodges Ward Elliott.

While 2020 began strongly with transactions in January and February up 2.5% on 2019, subsequent lockdowns across Europe, coupled with limited availability of debt financing, pushed transaction levels down -66% with only one type of buyer – high net worth individuals – investing in larger volumes of hotels than in the previous year.

Total European hotel transaction volume fell by 69% in the year of the pandemic, following a record high the previous year, when €27.1bn-worth of hotel deals were made.

According to the report, hotel transaction volume reached €8.5bn last year with single asset transactions accounting for 65% totalling €5.5bn, and portfolio deals representing 35% at €3bn.

At the top of the transaction table was the UK, which posted the highest level of investment volume across Europe with a total of €2.1bn (£1.8bn). Notably, €1.6bn-worth (£1.4bn) of UK transactions were London-based.

Second was Germany, with total hotel investment volume for the year reaching €1.7bn. Munich was its most favoured city with €501m-worth of transactions.

Looking ahead, HVS expects the second half of 2021 will begin to show signs of transaction volume recovery, but that the bulk of the recovery is likely to happen in 2022, running in parallel with rising hotel revenue streams.

“The full impact of the pandemic is expected to affect the transaction market later this year ahead of a gradual market recovery. However, the majority of volume recovery is expected in 2022 as the leisure and corporate travel sectors start to recover."

Shaffer Patrick, associate, HVS Hodges Ward Elliot, London


  • Total transaction volume down 69% to €8.5bn
  • Single asset transaction volume down 54% to €5.5bn, portfolio transactions down 80% to €3.0bn
  • Average price per room across all transactions down 11% to €175,000
  • Transaction volume recovery expected in H2 2021 and 2022

Be informed...

Established in 1980, HVS is a global leader in consultancy and services focused on the hotel, mixed-use, shared ownership, gaming and leisure industries. Find out more

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