CBRE: Optimism grows for hotel investment in Europe. Italy and Rome making a comeback in the rankings of places most sought after by investors

According to theEuropean Hotel Investor Intentions Survey 2025* by CBRE, a global leader in commercial real estate services and consulting, confidence in the European hotel market continues to grow: the 90% of investors in fact plan to maintain or increase the capital allocated in the sector. Despite geopolitical concerns cited as the main challenge this year, the hotel sector stands out for competitive returns and optimistic outlook, further boosting investment toward the hotel sector.

Excellent results for Italy, both nationally and at the city level. In fact, Italy is confirmed as one of the most desirable destinations for investment in the hotel sector, surpassing the United Kingdom e placing second after Spain. The growing interest in the Italian market is supported by the diversity of accommodation offerings and the emergence of new international hotel chains. Third place ex aequo is shared by Portugal and the United Kingdom, with France and Greece maintaining fourth and fifth positions, respectively.

City level, Rome has climbed the rankings, coming in third place among the most attractive cities for hotel investment, preceded by London (first) and Madrid (second), advancing from the fourth position held last year. Lisbon and Barcelona round out the top five.

"The persistent imbalance between supply and demand across Europe continues to be a key factor for the industry" said Kenneth Hatton, Head of European Hotels at CBRE. "We are seeing competitive bidding from potential buyers looking to secure the best assets, as evidenced by last year's hotel investment volumes, which grew by 34 percent over 2023, the largest annual increase for any sector in Europe".

Investors continue to focus on urban products. The 65% of respondents consider city centers (CBDs) and gateway cities the most attractive locations, confirming their status as a hub of long-term demand, supported by business and leisure travel. Secondary cities have gained ground and, according to CBRE's survey, the 12 percent of participants said they represent the most attractive investment opportunities, driven by growing confidence in emerging tourism markets due to improved infrastructure and evolving travel patterns.

When asked which strategy was preferred for capital deployment, two-thirds of investors said they preferred value-add strategies: a significant increase from 51 percent in last year's survey, when there was a greater propensity to seek distressed strategies. Investors remain convinced that the European industry can benefit from repositioning and operational improvements to drive total returns.

Hatton added: "Investors still see opportunities in the highly professionalized European hotel industry, where investments in capex, improvements in facility operations management, and expansion strategies offer prospects for very attractive returns, especially in a positive environment for expected supply and demand dynamics."

Silvia Gandellini, Head of Capital Markets Italy at CBRE, added: "Investment in the hotel sector in Europe continues to show strength, with growing interest in quality assets and key destinations, especially in the upper-upscale and luxury segments where the best performances have been recorded. In Italy, especially, we are seeing a renewed appetite from investors, who are targeting high-end facilities and locations with strong tourist appeal. The survey confirms that the cities of Rome and Milan are among the main European destinations on which this interest is focused."

*CBRE's 2025 European Hotel Investor Intentions Survey was conducted between Oct. 21 and Dec. 2, 2024, collecting the opinions of 110 investors, including hotel owners and developers, private equity, institutional investors, private investors, and real estate funds, with responsibilities on assets under management (AUM) ranging from less than $250 million to more than $5 billion globally.