Top 10 Most Attractive European Cities For Hotel Investments In 2023 (New Survey)

The hotel industry suffered the consequences of the COVID–19 pandemic with negative results. Nevertheless, in the midst of the COVID-19 pandemic, we saw new hotels opening and smaller ones being acquired by large chains. Ten cities in Europe are the most popular for hotel investment in 2023. Despite the unfavorable climate, the industry managed to stay alive and is now preparing for the coming years according to the new market trends.
The first three cities on the list are Amsterdam, Lisbon, and London. Paris, Madrid, and Barcelona follow. Rome, Berlin, Athens, and Dublin occupy the last four places on the list.
Amsterdam remains at the top of the list as the most alluring European city to investors in 2023 regarding the hotel sector. Lisbon has risen to second place on the list, and Portugal appears to be gaining interest in the hotel sector daily. Another thing is that Paris gained popularity again after a hard period due to the COVID-19 pandemic. The year 2021 was a really hard year for Paris, but it seems these days are gone. The city of Paris has seen a rebound in corporate and leisure travel. This happened soon after they erased the restrictions due to the COVID-19 pandemic.
It is worth mentioning that the UK (37%), Germany (29%), and Ireland (28%) are nowadays considered destinations with low investment interest. Greece (31%), Spain (33%), and Portugal (33%), on the other hand, are on their way to the top.
More specifically, many investors from abroad have shown interest in putting their money into the hotel sector in Greece. Also, there is great interest from large hotel chains in expanding in Greece. These investors are interested in constructing luxury resorts or boutique hotels not only in Athens but also in many other regions that have prospects in the tourism sector.
Investors’ trust in the hotel market in the UK declined compared to last year. However, some investors seem to find the UK alluring since 66% of hospitality owners see the future with optimism. Concerning the UK market, it is worth mentioning that Edinburgh is the number one region for investors’ interest. Edinburgh holds first place on the list of the most alluring cities for hotel investments in 2023 in the UK. It seems that every year the interest rate rises by about 12%. Although Edinburgh does not have much space for new hotels, it still attracts investors’ interest. Manchester is ranked second because it is a reasonably priced city with good airport connectivity. Also, London has lost its luster since it fell 13% in points compared to a year ago. This is a sign that maybe London can’t accept any more investments.
Private equity was the main investment formation in 2022 for the new hotels that are about to be constructed, reaching 27% from 47% in 2021. Another 20% comes from real estate funds and REITs, a little bit higher compared to 2021, which reached 17%. Hotels’ funds reached 16% and institutional investors’ 7% in 2022.
The above data come from a survey that Deloitte conducted.

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