Unleashing the Potential of European Hospitality Real Estate

As European hotel demand moves beyond recovery into structural growth, the Cushman & Wakefield European Hotels Update H1 2026 assesses market performance across demand, operating metrics, investment activity and outlook. Travel demand continued to expand in the first half of 2026 despite heightened geopolitical uncertainty, led by Southern and Central & Eastern Europe, with EU visitors spending 1.32 billion nights in tourist accommodation — the highest first-half volume on record. Performance growth was rate-led: European RevPAR rose 3.0% year-on-year to €101, driven by a 2.2% increase in ADR and supported by a 0.5 percentage point gain in occupancy, with 22 of 26 reporting countries recording growth.

Profitability remained resilient, with GOP margins ranging from 26% to 47% across the 15 analysed urban markets — London and Edinburgh leading, and Milan recording the strongest uplift on the back of the Winter Olympics. Investment activity stayed well above trend, with transaction volumes exceeding €11.5 billion, 22% above the 10-year average, as single-asset deals rebounded and transactions above €100M increased by 30%. Luxury and Upper-Upscale assets accounted for 46% of volume, lifting the average price per room 9% year-on-year to €228,000. Looking ahead, the outlook for H2 2026 is one of moderate optimism: continued demand growth, uneven supply pipelines and stable prime yields, with performance increasingly dependent on ADR rather than occupancy gains.