Hotel Operator Compass

Discover where Europe's hotel operators are heading next, and the trends reshaping how deals are structured

Cushman & Wakefield's fourth Hotel Operator Compass captures the views of 138 senior executives from hotel operators active in Europe. The operators that disclosed their identity account for more than 1.3 million rooms across 10,400 hotels, with a further 230,000 rooms in the development pipeline.

The 2026 edition shows Southern Europe as the region's most attractive area for operator growth. Four of the top five markets are in Spain and Italy, with Madrid, Rome, Milan, London and Barcelona leading the ranking.

Cities remain the main focus, with 95% of operators expressing high or very high interest. Appetite for leisure-led expansion is also strong: with 72% of respondents targeting seaside resorts, with the Côte d'Azur, Costa del Sol and Balearic Islands cited most often.

Intense competition for prime locations is pushing operators towards increasingly competitive contractual terms, with rent coverage ratios as low as 1.4x and management base fees at 2% or less in key cities. Owners are also seeking greater contractual flexibility, with more than a third of operators reporting increased inclusion of key money, flip-to-franchise options and early termination rights. Looking more closely at leases, 57% of operators sign or would consider lease contracts, with 40% indicating increased appetite for hybrid lease structures over the past 12 months.

Pipeline challenges continue to constrain hotel development, with around 17% of projects mentionned as delayed and a further 12% on hold. Funding (47%) and permitting (46%) remain the main barriers to delivery, despite operators’ continued appetite for growth.

Sustainability and AI continue to shape the industry, albeit at different speeds. Sustainability remains a consideration in commercial terms, although its influence has eased, with the share of operators willing to offer incentives declining from 49% in 2023 to 31%. AI, meanwhile, is rapidly gaining relevance, with 86% of operators expecting it to have a significant industry impact, either already or within the next two years, despite uneven adoption.

For more details, please contact Borivoj Vokrinek.