Five star hotels saw a significant price premium over four star in 2024, according to the latest study from Global Asset Solutions.
The company reported on a thriving transactions market for the luxury and upscale segments, with investors eager to acquire assets in Europe.
Total transaction volume for 2024 reached €10.95bn, with 137 hotel transactions recorded. The average deal size was €79.9m, with five-star hotels achieving €865,334 per key and four star €295,339 per key.
Exceptional hotels command exceptional prices and 2024 was no different, with properties such as the historic Bauer Hotel on Venice’s Grand Canal coming to the market and sparking an extremely competitive sales process to achieve the reported €300m price.The hotel will now undergo significant investment before reopening as the Hotel Bauer and is part of a growing trend in Europe, as iconic hotels are given new life, raising the luxury bar ever higher. Robert Walters, CIO, Global Asset Solutions
The UK, France, Spain and Italy were the most active hotel investment markets in 2024, accounting for over half of the total transaction volume across Europe. The UK (16.3%) and France (16.1%) led the market, with close to a third of all transactions. Paris and London were the leading cities, accounting for almost a quarter of the total transaction volume. Paris, with €1.38bn in transactions, led the market, while London followed closely with €1.27bn.
Paris and London continue to exhibit strong fundamentals as iconic destinations for both business and leisure travellers. Both cities have seen an increase in luxury supply in recent years, in particular in London, with skilled, specialist asset management needed to ensure that hotels new and established are able to maximise their performance.”
Institutional investors led the market, accounting for 27.6% of investment volume, followed by owner-operators with 21.2% and private equity with 19.7%.
The potential of the hotel sector is increasingly understood by both new and established investors and the luxury segment is the priority for many looking to add this rewarding asset class to their portfolios. Luxury hotels can deliver spectacular returns, but are also amongst the most complicated properties available. Only with an experienced asset manager can owners be certain that they are not only driving profits, but securing the best strategy for their investment.Walters
Investment appetite for luxury hotel assets continued into January, with 11 transactions recorded in the first month alone.
During the month 1,841 hotel rooms were transacted at an average price of €652,000 per key, reflecting a 40.2% increase from the 2024 average across four and five star hotels, underscoring confidence in premium hospitality investments.
To read the full report, click here
About Global Asset Solutions
Global Asset Solutions operates worldwide providing independent hotel asset management services. Clients include PE firms, institutional investors, sovereign funds and family offices, with over $20bn of assets managed in Europe, Asia and the Middle East. The company leans on decades of experience in the luxury sector to deliver bespoke solutions which allow investors to grow their asset value and realise the potential of their assets. www.globalassetsolutions.com
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