Savills News

Emerging European cities and alternative operating structures offer hotel investment opportunities

According to Savills latest European hotels trend report, emerging European tourist cities, notably Prague and alternative operating structures such as non-leased operating structures offer higher yielding opportunities for those investors willing to take on more risk.  
  • Strong demand fundamentals means the higher yields available in emerging growth cities and Eastern European markets are looking increasingly attractive to investors willing to move up the risk curve
  • Cross-border buyers drive the majority of hotel investment across European cities

Ben Maudling, CEO, Savills Czech and Slovak Republics, says: “Our latest research shows that the European hotel market is now a much more mature and liquid asset class than a decade ago with one of the broadest buyer pools in the real estate industry.”

European hotel transaction volumes remained high in 2018, exceeding those of 2017 according to RCA. Cross-border investors made up the lion’s share of transactions, accounting for 65.4% of total volumes in 2018, outstripping the 10 year average of 54.9%.

According to the World Tourism Organisation UNWTO arrivals to Europe accounted for more than half of global inbound tourist arrivals, totalling 713 million while increasing 6% compared to the year prior – cementing Europe’s position as global leader in terms of inbound travel and increasing accommodation requirements.

According to Savills, while well-established tourist cities such as London and Paris account for a sizeable share of international arrivals it is the smaller emerging cities that are reporting the strongest growth. Prague, Lisbon, Bucharest, Budapest and have all reported strong growth in airport arrivals over the last three years alongside increasing interest levels as indicated by travel-related Google searches.


Download the full report here


Recommended articles