Germany best European market for hotel investment in 2016

According to the annual “European Hotel Transactions Report” published by HVS Global Hospitality Services, in 2016 the total European hotel transaction volume reached 17.8 billion euros, falling by 25% from the outstanding performances in 2015, as investors kept quiet after the unsteady political and social panorama.  

Europe continued to represent an attractive market for Asian and North American hotel investors which, according to a Deloitte survey, will dominate the European market also in 2017. 
Notwithstanding, last year saw the return of big European players, which registered 83% of total investments and recording 14.6bn euros, while American investments flows fell by 88% and Asian’s by 61%.  
In particular, the most surprising data resulted from the German market, which overtook UK for the first time ever in attracting foreign investments. Germany performed a volume of 4.4bn euros, while UK totalised 3.6bn. In detail, Germany surged ahead with 2.5bn euros of portfolio assets changing hands, growing by 30% if compared to a 83% reduction of UK’s. Frankfurt and Berlin registered more than 650 million euros attracted investments but, despite this, London continued to be the leading European hotel transaction city, with a total volume of around 1.8bn euros and followed by Paris, a recovering market that recorded 1.1bn euros. In France, transaction volume grew up from 1.5bn to 1.9bn, and single asset transactions recorded a 130% growth yoy, apart from Paris and Nice.  
Further performing markets were Spain (+12%, up to 2.1bn), along with Italy, Ireland and Austria. 
According to 4Hoteliers, UK loss in attractiveness is mainly due to the Brexit consequences which became realistic during the last quarter of 2016. 

At Twissen we observed that European hotel investment market performed well in 2016, even though disappointing results were recorded in the UK, in particular from the intercontinental investment flows origin markets. Notwithstanding, Europe keeps its leadership in attracting investments, in spite of the recent social and political challenges. 
 

Francesco Redi

President and founder at Twissen. Manager in Local Development, Tourism Policies,  EU Funds. He cooperates with several European universities, public bodies, development agencies, DMOs and enterprises.