BNP Paribas Real Estate publishes figures on the hotel investment market for the 1st quarter of 2025
Even though the upward trend has not yet been sustainably reflected in the investment data, the hotel division has continued the recovery of its market environment unabated in the first quarter of 2025: For the first time in 2024 as a whole, guest overnight stays were reported again (a good 496.0 million), which are slightly above the pre-Corona values from 2019 (around 495.6 million). And in January 2025, the Federal Statistical Office was also recently able to confirm this positive trend at the start of the year with an increase of 3.1% compared to the same month a year earlier. This is the result of the analysis by BNP Paribas Real Estate.
If one now assumes a relatively stable development of the global trouble spots as a framework for investment activities, it should therefore only be a matter of time before the noticeably increased investor confidence is again measurably expressed in the registered transaction volume. Last but not least, the investment approaches that are emerging and in the preparatory phase give rise to this forecast. In total, around €238 million was invested in hotel assets in the past three months, which in the first interim balance sheet confirms the previous year's result. Against the background that some larger sales were still brought over the finish line in the year-end business in 2024 and the number of deals included can be rated as good, the Q1 conclusion is therefore positive overall.
So far, the result has been based entirely on individual deals, but this is not to be considered unusual in view of recent years. German buyers generated just under 61% of the result, while international investors accounted for a good 39%.
54% in A-cities; 51% with medium-sized sales
In the top markets, a volume of almost €129 million was generated, which includes smaller and medium-sized deals with an average turnover of just under €22 million. The largest transaction in the overall market to date was completed in Cologne: With the Hotel Pullman Cologne, the Swedish investor Pandox has added another asset to its existing hotel portfolio. Among other things, the investment approach and the underlying plans of the project developer Centralis, which acquired the Hotel Stadt München in the city of Düsseldorf at the beginning of the year in order to convert the property into serviced apartment use, is also worth mentioning. Outside of the largest investment locations, the Holiday Inn - the niu, Crusoe Bremen Airport near Bremen Airport is one of the most extensive drivers.
While the Hotel Pullman Cologne boosted sales in the category above € 50 million (a good 26 % per share), the investments in Düsseldorf and Bremen are in the range between € 10 million and 25 million (a good 22 % per share).
Prospects
"After a good final quarter, the hotel investment market has made a promising start to 2025, with the mood among the most important market players currently even better than the investment volume initially suggests," explains Alexander Trobitz, Managing Director and Head of Hotel Services at BNP Paribas Real Estate GmbH.
The most important main reasons for this are the very good performance indicators, which are already at a high level and nevertheless show further upward trends. In the slipstream of these now good market conditions, numerous transaction processes are currently underway in the background, which allow us to look confidently at the sales development in the further course of the year.
However, it is also part of the truth that high investment volumes are usually based on isolated large deals in the three-digit million range, which have become much rarer, not least due to the significant price correction. In this context, the sale of the Motel One Hotel in the Upper West in Berlin should be mentioned. The striking landmark property opposite the Memorial Church was included in the investment turnover of the office division due to its significant share of rental income from the office segment. As a figurehead of the positive market story of the hotel investment market, however, this deal still has the clout to have a certain signal effect for the coming months and quarters.
"Despite all the confidence, however, there are currently still very complex external and global disruptive fires that can always stand in the way of confidence in the commercial investment markets. However, if these trouble spots do not come apart at the seams and the economy continues to be stimulated at the same time, the doors will be open for the hotel investment market for further positive news in the middle of the year," adds Alexander Trobitz.
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