OPINION. “Hotel investment in Europe, a new El Dorado? », by Jean-Marc Palhon, president of Extendam

Weak growth, persistent geopolitical tensions, lastingly higher financing costs, political uncertainties... at first glance, the European environment does not appear to be a particularly favorable environment for investment. However, one sector continues to show high levels of activity: the hotel industry.

This apparent contradiction deserves some attention. In 2025, nearly 3.1 billion nights were recorded in tourist accommodation in the European Union, a new record and an increase of 2.2% over one year. The increase was even more pronounced for international customers, whose overnight stays increased by 3.4%.

At the same time, the continent's economic outlook has remained modest. This depth of demand has been reflected for several years in the operational performance of European hotels. Indeed, the occupancy rates observed between 2022 and 2025 are significantly higher than those of 2019, a year which was considered a record year before the Covid-19 health crisis.

Over this same period, average European hotel prices increased by 35.0%. The dynamic did not stop in 2026: in the first half of the year, European hotel revenues continued to grow across all hotel categories, with a particularly marked increase in the high-end segment (+5.8% in the first quarter and +2.6% in the second).

Should we conclude that the hotel industry has freed itself from the economic situation? Certainly not. But its dynamics today rely on forces that go well beyond that of the economic cycle alone.

“A hotel is not just a real estate asset”

Hotel investment is still too often analyzed solely through the prisms of real estate: changes in rates, cost of financing, value per square meter or compression of yields. These parameters count, but they are not enough to define an activity whose value depends first of all on its ability to generate an operating result.

A hotel is a real estate asset, but also a commercial enterprise. When the investment concerns both the premises and the goodwill, the creation of value depends not only on the positioning and quality of the operation, but also on the turnover, the control of costs and, ultimately, the EBITDA generated. This particularity profoundly changes the reading of the current context.

Unlike many real estate assets whose rents are adjusted over a long period, a hotel room is marketed every day at a different price. This ability to adapt gives the sector real pricing power in the face of , as long as demand remains sufficiently strong.

Machine-translated from French