Germany continues to stand out as a resilient hotel investment market despite a slight softening in performance in 2025. According to CBRE, recent declines in revenue were largely influenced by an exceptionally strong prior year driven by major international events. When viewed in context, market fundamentals remain solid, supported by limited new supply, steady demand recovery, and attractive return expectations compared with other European core markets. Institutional investors remain active, while international and private sources of capital are playing a growing role as investors seek diversification opportunities.
Interest is particularly strong in luxury and upscale hotels, with operational efficiency and rent coverage now critical considerations amid rising costs. Key cities including Berlin, Munich, Hamburg, and Cologne continue to attract both domestic and international capital thanks to their balanced mix of leisure and business demand. As the market looks ahead, CBRE notes that increased transaction activity will depend on more assets coming to market at realistic pricing and continued education around evolving lease structures. To gain deeper insights into these trends and what they mean for investors, listeners are encouraged to hear the full interview.