After the 2025 tourist season, hotel assets across Europe and the United States are not facing a slowdown but a recalibration. What was once expected to be a post-season pause has instead become a phase of selective capital deployment. Transaction volumes have remained resilient, but the logic behind deals has changed. Buyers and sellers are now focused less on momentum and more on operational performance, resilient locations, and assets that can be repositioned efficiently.
This shift is visible across multiple segments of the market. Investors are targeting destination resorts with extended seasons, ski-linked and year-round leisure assets, as well as new-generation urban resorts. Urban hotels embedded in transport corridors and business infrastructure are also in focus, particularly where value-add opportunities exist and price per key remains below replacement cost.
A Market Driven by Operations Rather Than Cycles
Hotels have re-established themselves as one of the more resilient components of commercial real estate. Data from HVS indicates that the first half of 2025 showed stronger activity in individual hotel transactions, while portfolio volumes weakened. This pattern reflects a structural change rather than a temporary pause. Investors are no longer buying hospitality as a broad thematic exposure. Instead, they are underwriting operational performance, capital expenditure discipline, and the ability of assets to retain pricing power once peak tourism subsides.
The post-season market has therefore become more analytical. Assets are assessed on their capacity to perform outside peak months, absorb higher financing costs, and justify refurbishment or repositioning strategies without relying on aggressive leverage assumptions.
Who Is Buying After the Season and Why
During the period of low interest rates, hotel investors were driven by a wide range of motivations, from yield compression to portfolio diversification. In the post-2025 environment, those motivations have narrowed. Private equity firms with strong hospitality expertise are among the most active buyers, particularly US-domiciled funds deploying capital into Europe. Their strategy reflects a willingness to assume operational risk in exchange for value creation through repositioning, brand upgrades, and improved revenue management rather than financial engineering.
Long-term institutional capital has also become more visible. Pension funds, open-ended real estate vehicles, and French SCPI structures are increasingly active through income-oriented strategies. Sale-and-leaseback transactions and long-term operating leases allow these investors to secure predictable cash flows, inflation protection, and covenant-friendly structures that align with conservative risk profiles.
A third and rapidly growing group consists of family offices and private capital. These investors prioritise long-term capital preservation over short-term yield and are focusing on urban “trophy” assets in cities with structural supply constraints. Paris, Madrid, and several Italian cities have returned to the top of this list, despite elevated pricing levels, as scarcity and long-term value preservation continue to outweigh near-term yield considerations.
Three Investment Trends Shaping the Post-2025 Market
One of the most pronounced trends emerging from 2025 is renewed demand for large resort assets with extended or year-round operating seasons. A landmark transaction illustrating this shift was the sale of the 1,037-room Mare Nostrum Resort in Tenerife for €430 million, implying a price of approximately €415,000 per room. Industry analysts interpret this acquisition as a clear signal that resorts with twelve-month demand profiles can justify higher capital expenditure and perform reliably even in a higher cost-of-capital environment. Southern Spain and the Canary Islands are increasingly viewed as structurally undersupplied when compared with mainland Mediterranean destinations that remain heavily dependent on summer tourism.
In contrast, prime urban hotels have once again asserted their pricing power. Recent transactions in Paris highlight this dynamic. The 75-room Hotel Grand Cœur Latin was acquired by a private investor for more than €70 million, or roughly €933,000 per room, while the 43-room Hotel Filigrane & Spa traded for over €36.5 million, equating to approximately €850,000 per key. Such pricing levels explain the intensity of competition for centrally located assets. In cities where supply is structurally constrained, scarcity and long-term capital preservation consistently outweigh concerns about yield compression.
Between these two extremes lies a growing volume of value-add and structured transactions. Diverging expectations between buyers and sellers have made sale-and-leaseback structures and clearly defined renovation programmes an effective compromise. A representative example is the acquisition of the 258-room Hotel Abades Nevada Palace in Granada for €30 million, or around €116,000 per room, by a French SCPI vehicle. The transaction included a 15-year leaseback to the operator alongside a €5 million refurbishment commitment. This structure allows the seller to release capital without exiting operations, while providing the investor with income visibility and controlled execution risk.
Is “Price per Key” Making a Comeback
Following the 2025 season, hotel transactions are once again being discussed primarily in terms of price per room, as this metric provides a rapid indication of asset positioning and risk. Recent European deals show a coherent but wide range, from approximately €116,000 per key for leased value-add assets in secondary cities, through €415,000 per key for large-scale resorts, up to €850,000–€930,000 per key for prime Parisian hotels.
Recent Hotel Transactions After the 2025 Season
| Location | Asset type | Rooms | Transaction value | Price per key | Investment profile |
|---|---|---|---|---|---|
| Tenerife, Spain | Beach resort | 1,037 | €430 million | ≈ €415,000 | Year-round leisure resort |
| Paris, France | Prime urban hotel | 75 | > €70 million | ≈ €933,000 | Trophy city asset |
| Paris, France | Urban hotel & spa | 43 | > €36.5 million | ≈ €850,000 | Prime city centre |
| Granada, Spain | Urban hotel (leaseback) | 258 | €30 million | ≈ €116,000 | Sale-and-leaseback, value-add |
| Washington, D.C., US | Urban hotel | ~410 | $92 million (≈€88m) | ≈ $224,000 (≈€216,000) | Stabilised city asset |
Financing Conditions and the Role of Debt
Debt availability has become the key gating factor for post-season activity. Senior euro-denominated loans for stabilised hotel assets are typically structured at loan-to-value ratios of 55–65 percent, with margins of Euribor plus 165–350 basis points and tenors of five to seven years. This environment rewards operationally sound assets and penalises speculative business plans.
Where bank lending becomes restrictive, private credit has stepped in, offering flexibility at a higher cost. As a result, buyers are no longer simply acquiring hotels. They are acquiring assets capable of passing lender underwriting in a tighter and more selective credit market.
What the Market Is Signalling for 2026
Investor sentiment surveys from CBRE continue to rank Spain and Italy among the most attractive hotel markets in Europe, with London and Madrid leading at the city level. Yet the core tension remains unresolved. Many sellers still anchor pricing to pre-rate-hike return expectations, while buyers underwrite deals using today’s cost of debt.
The outcome is not a broad market correction, but a steady flow of structured transactions — sale-and-leasebacks, partnerships, selective disposals, and refinancing, often incorporating green-loan criteria. In the post-2025 landscape, hotel assets are no longer acquired for momentum alone. They are bought for resilience, operational depth, and the ability to perform when peak trading periods are already behind them.
