The study ‘2024 European Hotel Investor Intentions Survey’, developed by CBRE, reveals encouraging prospects for the hotel sector, with around 90% of investors planning to maintain or increase the volume invested in the tourism sector next year.
This optimism is fueled by the solid performance and resilience of hotel assets, which should suffer fewer discounts compared to other types of assets. However, the possible price adjustment is also an important factor for some investors, with 28% citing it as the main reason for increasing investment in hotel assets.
Despite confidence, the study highlights that the cost of capital is the main challenge for hotel investors in 2024, driven by rising interest rates as a way to combat inflation. Furthermore, the shortage of qualified labor is also highlighted as a factor impacting the industry. In Europe in particular, geopolitical instability is another topic that investors are following closely.
According to the study prepared by the international consultancy, in 2024, Spain leads the list of most attractive countries to invest in hotels. Portugal appears for the first time in 7th place in this ranking, demonstrating great potential, both due to the diversity of destinations offered (short city break in Lisbon and Porto; beach in the Algarve and Comporta; nature in Madeira, Azores and Alentejo), and the quality of the service.
Duarte Morais Santos, Hotels Director at CBRE
National performance expectations – CBRE Framework
“The results of this study indicate that the European hotel sector is positioned for a year of good opportunities. Growing investor confidence and strong demand for hotels in key destinations are clear signs that the sector is resilient and ready to face future challenges ” – points out Duarte Morais Santos, Hotels Director at CBRE, who adds: “With innovative strategies and a focus on added value and offering experiences, we hope to see continued positive evolution in the hotel market in 2024.”
While resorts continue to be in demand, hotels located in the Central Business Districts (CBDs) are the most popular among investors. City breaks continue to be preferred destinations, with London maintaining its leadership in the ranking of the most attractive destinations, while Madrid has gained popularity.
Value-add strategies continue to dominate, with opportunities to reposition and value assets experiencing greater demand. Among European investors, there is a preference for soft brands over hard brands, with full-service still playing a significant role in investment decisions.
The ‘2024 European Hotel Investor Intentions Survey’ thus shows that the hotel sector continues to be an attractive investment, with strong prospects for 2024. Stability and growth, combined with the popularity of European destinations, make the hotel sector a solid choice for investors.
