The hotel and tourism industry plays a central role in the European real estate sector and has shown strong market momentum for several years, with the European hotel market is experiencing stable growth. Long-distance travel from the US, China, Japan, and other populous regions is recovering. International business travel is also increasing noticeably, with a further 10% rise expected in 2026.
Strong tourism trends for the coming years centre on sustainability and customer experience orientation, with hotel operators increasingly focusing on renewable energy and waste reduction strategies. As stricter European standards drive ESG compliance, these measures are becoming essential to enhancing a project’s attractiveness to investors. At the same time, personalised and culturally tailored experiences are reshaping traveller expectations, prompting the industry to innovate in both accommodation design and customer service. Complementing these shifts, rising automation and AI driven processes are making travel more flexible and bespoke, giving market participants who embrace these trends a clear competitive advantage.
Despite dynamic trends and growing demand, hotel development in Europe remains disciplined, supporting a healthy supply demand balance and stable occupancy levels. This combination – despite the general economic uncertainties – supports a positive investment climate and boosts the attractiveness of the hotel/tourism asset class.
Investment activity is expected to increase in the coming year, particularly from private capital providers and family offices. The availability of equity for hotel and tourism projects is also expected to improve. A favorable environment for developers, operators, and investors.
Beyond market participants, the revitalisation of the tourism sector has positive effects on cities and regions. Hotels often act as catalysts for urban renewal. They attract complementary services (restaurants, cafés, shops), can stimulate new infrastructure investments, and frequently transform surrounding neighborhoods.
