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Hospitality Net
3 days ago
- Business
- Hospitality Net
European Hotel Investment Market: Insights and Outlook After a Record Year
Hotel Investment Holds Steady in Q1 2025, with a Promising Hotel Investment Outlook in Europe European hotel transaction volumes reached €5.5 billion in Q1 2025, flat year on year with 2024 but still 24% above the 2020–2024 five-year average. With several deals in the making, we expect 2025 volumes to surpass last year and reach about €25Bn. This is assuming a continued gradual recovery of the lending landscape. With an increased maturity in the hotel sector and growing interest in the Hotels Sector from core institutional capital, market volumes are forecast to grow further in coming years. Hotels are typically more resilient than most other asset classes in a high inflation environment, due to their ability to quickly react and adjust to increase prices, whilst at the same time having opportunities to manage their costs. As such, the typical investment model offers investors value-add opportunities in a high interest rates environment. In addition, some assets, such as ultra luxury/iconic hotels, might suffer less from these impacts. European Hotel Deals Soar Above 5-Year Average in 2024 European hotel transaction volumes reached €22.3Bn in 2024, a +36% increase vs 2023, and also 19% above the 5 years' average (2019-23). This market volume was underpinned by the closing of several large portfolio deals (accounting for over one third of the total in 2024), as well as a number of major single asset transactions. The catalyst for this growth was a strong trading recovery and positive trading outlook, backed up by increased debt availability, at margins which were accretive to investment returns. Investors focused principally on urban markets with a solid leisure component (such as London, Paris, Dublin, Amsterdam, Rome & Barcelona), as well as leisure-driven destinations (Iberian Peninsula, France and Italy). Alongside these core markets, there was notable increases in investment volumes (within the top-10 markets) in Greece (+290% vs 2024), Norway (+248%) and Ireland (+209%). Despite a cautious approach due to the current geopolitical uncertainties, the market sentiment remains very positive. Hotels are a 'hot' asset class at the moment, given their value-add opportunities (beneficial in a high lending cost environment), strong recent performance, hedge against inflation and offering an excellent opportunity for investors to diversify their investment holdings. Several landmark transactions and large portfolios drove 2024 results Key portfolio transactions included the acquisition of 33 Marriott hotels by KKR, Amante Capital and Baupost from ADIA in Q4, Blackstone's purchase of Village Hotels (33 hotels) from KSL Capital Partners in Q2, the sale of 10 Radisson Edwardian hotels to Starwood Capital Group in Q1 and the acquisition of 21 hotels from Land Securities by Ares Management and EQ Group in Q2. The most significant single-asset transactions were Amundi's sale of the Pullman Paris Tour Eiffel to Morgan Stanley and QuinSpark Investment Partners, Signa's sale of the Bauer Hotel in Venice to Mohari Hospitality and Omnam Investment Group, Kennedy Wilson's sale of the Shelbourne Hotel in Dublin to Archer Hotel Capital, Blackstone's sale of the Hilton Paris Opera to City Development Limited and Hines and Henderson Park's sale of the Grand Hyatt Athens to Hotel Investment Partners. A growing trend in Europe involves converting commercial buildings into hotels, exemplified by the sale of London's iconic BT Tower to MCR Hotels for transformation into a luxury hotel. What's Driving the High Transaction Volumes in Europe? European hotels are liquid: in 2024, it represented about ¼ of the global room supply (27%) but more than 1/3 of the transaction volumes (37%). This is driven by: A good mix well-established urban markets and of established resort destinations with limited supply growth. Strong operating performance: 2024 RevPAR up 34% vs. pre-pandemic, surpassing Americas (+32%) and APAC (+6%), trailing MEA (+58%). High operational margins: our samples of branded full-service hotels in 15 major European markets show healthy Gross Operating Profit margins (ranging between 27%-47%). 13 out of the 15 markets recorded a growth of GOP PAR in 2024 versus 2023, with an average increase of 10%. This is positive news given the ongoing inflationary pressures and lack of labour. High levels of transparency of markets providing confidence for investors In the context of all asset classes (office, retail, industrial & logistics), the hospitality sector increased in attractiveness among investors, due to its positive growth metrics and strong value-add potential. In addition, investment was supported by favorable currency dynamics. In 2024, the USD strengthened notably against the Euro, enhancing the appeal of European assets for dollar-based investors. Sources: STR, HotStats Recent Changes in the Transactional Landscape A key change since the pandemic has been the shift towards investments in resort assets (as opposed to urban destinations), driven by positive consumer trends (more spending on experiences rather than goods, and the ability to combine work and leisure), as well as a recognition by many institutional investors of the resilience of leisure demand. We are witnessing a continued rising trend of conversions of existing commercial assets into hotels, especially in established mature markets, driven by constrained pipeline, hotels' growing appeal over other asset classes, and ability to deliver alignment with ESG goals. There has also been a trend from some significant investors (such as Brookfield AM and Archer Hotel Capital) to take direct operational control by integrating or establishing management and investment platforms into their structures, rather than accepting a traditional HMA or lease model, which may limit control and reduce returns. Top Investor Picks for 2025: Southern Europe Leads, Prague Sees the Sharpest Rise According to our latest Investor Survey (Investor Compass 2025), the most attractive cities for investors in 2025 are Madrid, Barcelona, Rome, Milan, London, Lisbon, Paris, Amsterdam, Munich, and Berlin. However, the largest increase in attractiveness relative to 2024 is in Prague (+14%), Munich (+8%), Milan (+4%) and Edinburgh (+4%). In 2024, the most attractive markets (by investment volume) in Europe where: EUR, Millions — Source: Cushman & Wakefield & HotStats (data are rounded) Markets to Watch for Future Hotel Investment The most significant opportunity perhaps lies in Germany which has seen a significant drop in hotel volumes in recent years. Notwithstanding the weak short term economic outlook for Germany, as the largest economy in Europe, we expect a recovery of German investment volumes, which has historically been number 2 by investment volumes (behind the UK) in Europe. Emerging markets also include the South Eastern European region (incorporating countries such as Croatia and Greece) which has historically had lower liquidity, but experienced strong investment activity in Q1 2025, +553% vs 2019-23 5YRS average, as did the Nordics (Q1 2025 volumes +232%), as well as the Baltics (currently low due to impact of the War in Ukraine), and the Central & Eastern Europe region (especially Prague, with several landmark properties recently sold – including the Four Seasons and Hilton Prague, both acquired by PPF in 2025). ESG's Rising Role in Hotel Investment Decisions According to our latest investor survey, 31% of investors faced ESG-related issues with a major monetary impact (>€500K) during hotel acquisitions or dispositions in the last two years. Overall, about 67% of investors have encountered ESG-related issues (incl. non-monetary), but this is a decline compared to the preceding year (74%). The declining number of issues might be due to increased preparedness of assets ahead of dispositions as sellers seek to avoid ESG related negative impacts. According to our survey, investors are willing to pay a green premium for sustainable hotels (4.8% on average), but this may shift toward brown discounts as sustainability becomes a baseline expectation. Unlocking Potential: Challenges and Opportunities in European Hospitality Investment As ever, some of the challenges will present opportunities for hotel-savvy investors. The key challenges will likely include effective cost control (rising labour and inflation-driven supplier pricing), navigating the geopolitical environment (impact of border tightening on staffing and taxes on procurement), meeting regulatory and ESG compliance, and staying ahead of technological advancements. On the other hand, opportunities will arise for those who embrace technology (cost cutting opportunities, clearer vision with data-driven analysis). Demand growth is expected for transient accommodation driven by global demographics and lifestyle trends. European travelers are expected to live longer and are now allocating more time and money to leisure activities/holidays (shift from spending on good to experiences). Simultaneously, international travelers are seeing their populations and income growing. The growing trend of 'working from home' and combining work and leisure will benefit extended stay and hybrid formats of hospitality. As a result, we expect more capital to be deployed in the European hotel sector in 2025 than in 2024. 56% of respondents to our investor survey intend to deploy more or at least the same capital than in 2024, with an increasing pool of buyers (more institutional, willing to shift from traditional asset classes towards alternative/living sectors). When approaching European markets, investors should assess demand diversity (balanced mix of domestic/international, leisure/business travelers), understand the supply/pipeline dynamics (European markets are very polarized: i.e., Brussels and Dublin have a greater pipeline (>=4% 2023-2025 CAGR) than markets such as Paris and Barcelona, which are expecting very limited pipeline additions (<=2%)), and recent tourism taxes/VAT changes (e.g., increasing tourism tax in Amsterdam). Furthermore, investors should integrate sustainability into their hotel strategy and ensure effective cost management. This article is based on an interview conducted by ChosunBiz:
Yahoo
10-05-2025
- Business
- Yahoo
Ethereum and XRP Are Facing Off in This 1 Key Segment. Which Will Win?
Holding real-world assets is a growth area within cryptocurrency. Ethereum is the field's leader right now, but it has a couple of important issues. XRP is a niche player right now, but it's poised to go big. 10 stocks we like better than Ethereum › Ethereum (CRYPTO: ETH) and XRP (CRYPTO: XRP) are both leading blockchains, but beyond that they don't seem to have too much in common. Whereas Ethereum is a nexus for decentralized finance (DeFi), the XRP ledger (XRPL) is the opposite, with many platforms and features intended to attract institutional capital from traditional financial players and payment processors. There is one emerging area where these two chains overlap, however. That segment could be worth trillions of dollars within the next decade. So which of these chains will win, and which is the better option for investors seeking to get exposure to the megatrend in question? Let's start by clarifying the domain of competition. XRP and Ethereum are digital assets that live on blockchains and are managed via self-custody digital wallets and accounts on cryptocurrency exchanges. Your house, car, and stock portfolio are, for the purposes of this conversation, real-world assets (or RWAs for short) that probably aren't on any blockchain. But if you wanted to put some of those assets onto a blockchain so that you could track and trade them more efficiently than you can currently, you'd need to tokenize them, which is to say, turn them into a crypto token that bears the rights to ownership. And that's what Ethereum and XRP are going to be competing over: Being the preferred location for investors and companies to park their tokenized real-world assets. While today there are about $22 billion of these tokenized real world assets, by 2030, there could be as many as $16 trillion. Therefore, any chain that makes itself the preferred place to hold such assets will see a major inflow of value that will likely send its price higher. Today, Ethereum is the chain with the most value stored in tokenized RWAs, hosting about $6.6 billion in value across eight different asset classes, including stocks, bonds, stablecoins, commodities, and U.S. Treasuries, among others. Across those eight classes, it has a total of 334 RWAs on its chain, though it's important to note that 54 of those are stablecoins, which are usually not included in a chain's total RWA value calculations because they're effectively the same as cash. Ethereum's positioning to continue its dominance in capturing a large share of the newly tokenized RWAs is not as strong as it may seem at first. While it's true that its project ecosystem means it can offer many different RWA platforms, as well as many opportunities to interlink RWA platforms with DeFi applications and other projects on its chain, its biggest weak links are regulatory compliance and its less-than-consistent relations with regulators in general. Most of the important features that asset managers absolutely must have, like tools to help them maintain compliance with know your customer (KYC) and anti-money laundering (AML) laws, are not natively built into Ethereum's protocol, though they may be in the future. Instead, users need to navigate a hodgepodge of different platforms, identity verification services, asset issuers, and so on. Each of those may aim to meet standards that are different than what is legally necessary, so users need to vet each element of the compliance stack individually to make sure it is sufficient for their specific needs. That makes the chain inherently less appealing for institutional investors looking for a seamless experience that won't leave them exposed to legal liability. Whereas Ethereum's approach is to allow its ecosystem projects to implement their own compliance tooling, or lack thereof, XRP's approach is to centralize everything into the ledger's operator, a company called Ripple that issues the crypto XRP, or into the control of real-world asset issuers on its chain. Compliance features are built into the core protocol and are thus lower friction for users. Trustlines, authorized accounts, account freeze functions, and blacklists allow issuers to enforce strict custody and transfer rules without needing smart contracts like Ethereum does. In other words, compliance is baked in from the top down, and so it requires less work for users. Overall, that makes XRP a far more appealing place for asset managers to tokenize their holdings. But, at least for now, XRP only has five RWAs on its chain, and four asset classes, with a total value of just $114 million or so. That sum is likely to increase as Ripple continues to build out the ledger to have more features to make compliance even easier so as to attract more institutional capital. What this means is that XRP is an underdog in the RWA tokenization race today, but it's likely to be a leader in the future. Could it surpass Ethereum's RWA value? Probably not this year or next year, but eventually, yes, it could. And given the piecemeal nature of Ethereum's regulatory compliance regime, it's a likely outcome in the long term. Before you buy stock in Ethereum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ethereum wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $717,471!* Now, it's worth noting Stock Advisor's total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Alex Carchidi has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum and XRP. The Motley Fool has a disclosure policy. Ethereum and XRP Are Facing Off in This 1 Key Segment. Which Will Win? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
