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Spain Tops Hotel Investment Rankings, Madrid Edges Out Paris in 2024

Spain has surpassed the UK as the leading investment hotspot, with Madrid climbing above Paris to become the second most favored city after London.

CBRE’s 2024 European Hotel Investor Intentions Survey provides insights from Europe-based investors about their interest in hotel assets, revealing a shift in preferred investment destinations and strategies for 2024.

According to the survey’s findings, there is a strong investor confidence in the hotel sector, with over 90% of respondents planning to maintain or increase their investments in 2024.

Hotels are anticipated to see less discounting than other real estate sectors, attributed to their resilient performance in trading.

Previously, the UK held the leading position as an investment destination. However, the latest survey reveals that Spain has now taken over this position. The increasing interest in Spain is further evident at a city level, with Madrid overtaking Paris to secure the second spot behind London in the 2024 survey. Here are the latest Madrid hotel openings.

Leading European countries for hotel investment in 2024

Map of top 10 European countries for hotel investment in 2024
Source: 2024 European Hotel Investor Intentions Survey, CBRE Research

The survey highlights the cost of capital as the primary challenge facing hotel investors this year, largely due to rising interest rates aimed at controlling inflation. Labor costs also emerge as a significant concern, with geopolitics influencing over 80% of investor decisions in Europe.

Investors are increasingly leaning towards value-add strategies, with a focus on repositioning opportunities. Unaffiliated hotels are in demand, with vacant possession being a priority for 36% of respondents. Among European investors, soft brands surpass hotels directly affiliated with the global brand family, while full-service hotels remain popular.

Hotels in central business districts (CBD) are gaining more interest than resort locations, although the latter remain popular. Gateway cities continue to dominate as the preferred destinations. Among gateway cities, London continues to hold the top spot in investor preference, with Madrid rising and Athens breaking into the top 10, reflecting Greece’s strong market presence in recent years.

Europe will remain an attractive investment destination for investors, bolstered by sustained growth of international visitors to key tourism hubs and gateway cities. Over the past decade, Europe has consistently accounted for more than half of total global international travel, a trend expected to strengthen further in 2024 and beyond.

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