Hotel values remain flat, although rates and occupancy show modest growth

European hotel values experienced the most modest increase in value in 2025 since the pandemic, according to the annual Hotel Valuation Index (HVI), from global hotel consultancy HVS.

Against a backdrop of ongoing wars, changes of leadership in the US and intensifying global instability, European hotel values showed a 0.2% increase through 2025. Hotel occupancy increased, on average, across the region, helped by the development pipeline remaining modest across most of the cities tracked by the research. 

Hotel values in some European markets experienced more positive rises than others, the report reveals. Copenhagen was the most exceptional, where strong demand and a slowing of new hotel supply prompted values to rise 5.9%, topping the HVI chart as the biggest gain. The city's hotels have benefited from continued strong demand and limited new supply, as well as from new connections from Copenhagen airport, factors which are likely to continue to boost this market’s performance.

Athens also saw a positive gain in 2025, with hotel values rising 5.5% as the city remained attractive to institutional investors. Other top performers include Bucharest, up 4.6%, following one of the most impressive rises in RevPAR on the back of the country’s strong economy. Madrid rose by 4.0% as tourism continues to benefit from the upscaling of a destination previously considered more corporate-oriented. Finally, Zurich saw hotel values rise 3.7% on the back of its well-established demand base and appreciation of the Swiss franc against the euro.

Some of the most challenged European cities highlighted in this year’s HVI include Istanbul, where hotel values dropped 7.6% due to the lasting cost increases as a result of persisting high inflation, along with further devaluation of the Turkish lira. Hotels in Amsterdam also saw a fall, down 5.9%, despite a slight lift in RevPAR year-on-year. Following the rise in VAT on hotel accommodation in January 2026, in addition to the city tax increase which occurred in 2024, the city of Amsterdam is expected to see a negative impact on leisure demand, especially room rates. 

Despite strong trading fundamentals, hotels in London, and Manchester both saw values down 3.4%, largely due to new supply coming on stream, coupled with a rise in overheads such as National Insurance, minimum wages and property taxes. These factors are expected to impact profitability in the short- to medium-term.

“While overall the HVI showed little movement in values across Europe as a whole, leisure demand continues to boost hotel performance, and therefore values, across Mediterranean markets and in Northern Europe. In Eastern Europe a combination of leisure and corporate demand and more stable inflation have driven hotel values up while in Western Europe there are more mixed results. Paris is still benefitting from a post-Olympic momentum but other markets are grappling with ongoing cost increases and modest growth in RevPAR,” said HVI co-author Margherita Rivetti, associate at HVS London,

Paris remains top of the chart when it comes to Europe’s most expensive hotels, followed by those in London,Zurich, Rome and Geneva. 

Identifying some of the trends likely to shape the performance of Europe’s hotel sector this year, the HVI highlights the issues of overtourism in some markets, the viability of lease agreements as an operating structure and the potential resurgence of inflation as a result of the Middle East conflict, which could eventually impact the cost of debt.

 “With new travel trends emerging in today’s hyper-connected digital environment, opportunities for hotels to use AI arise in the pursuit of increasing customer reach. Destinations which were, until now, considered too remote are increasingly sought by travellers searching for more unique experiences and create opportunities for hoteliers ready to spot them.” commented Maxime Gauthier, report co-author and associate at HVS London.

“The distinction between hotel and residential is increasingly becoming more blurred. While branded residential remains an important topic, as brands are now venturing into the furnished apartment space for short-term and extended-stay accommodation.”

Commenting on demand going forward, Sophie Perret, managing director of HVS London and HVI co-author, added: “Europe’s appeal to tourists will remain strong, which coupled with its modest project pipeline bodes well for hotel performance. However, the conflict in the Middle East and subsequent oil disruption could have a severe impact the longer it lasts, particularly on interest rates which will then impact the financing and refinancing of hotel transactions.”