The European hotel real estate market will enter a phase of structural maturity in 2026. The market environment is characterised by high but stable interest rates, a selective willingness to invest and increasing differentiation according to segments and locations. While capital remains available in principle, the quality of operator structures, cash flows and financing models is increasingly decisive for investment and transaction success. Blanket market strategies are becoming less important – individual, professionally structured hotel concepts are in demand. These are the results of the last online panel "mrp hotels quarterly" with Catherine Szolar, Vice President at mrp hotels, Hannah Struck, Senior Asset Manager at mrp hotels, Matthias Reith, Senior Economist at Raiffeisen Research, Francesco Fedele, CEO at BF.direkt AG and Erik Florvaag, CEO and Managing Partner at The Chocolate on the Pillow Group.
Macroeconomic environment: Interest rates stable, growth with the handbrake on
Matthias Reith, Senior Economist at Raiffeisen Research, does not expect any further key interest rate cuts from the ECB. "The descent from the interest rate peak is likely to end in the middle station for the ECB," Reith said. Inflation and growth are within the target corridor, so there is no further pressure to act in monetary policy. At the same time, the economic environment in Germany and Austria remains challenging. Although 2026 is characterized by an economic recovery, this will be moderate and below the growth of other European countries. For the tourism industry, this means challenging framework conditions – with robust guest demand at the same time. "Consumers are willing to afford vacations, even if they save elsewhere," says Reith.
Hotel real estate market: Differentiation instead of "one-size-fits-all"
According to Catherine Szolar, Vice President at mrp hotels, the hotel real estate market is neither in a crisis nor in a classic growth phase. Rather, a new normality has been established, which is characterized by clear segmentations. While Southern Europe continues to benefit from strong leisure demand, the DACH region is developing more slowly but steadily.
Investment decisions today are much more selective. "Capital no longer primarily follows location or brand, but stable cash flows, clear governance structures and the creditworthiness and quality of the operator," Szolar explained. The choice of operator and contract structure thus developed into central value drivers for the financial viability and exitability of hotel properties.
Portfolio analysis: Moderate growth amid continued pressure on efficiency
The performance data of the hotels served by mrp hotels show moderate growth in RevPAR and GOPPAR for 2025, which was mainly achieved through targeted rate increases. Higher room rates were enforced, especially during periods of high demand such as trade fairs, congresses and major events, while a much more competitive pricing strategy remained necessary in weaker phases. "Rate development is increasingly being controlled by targeted yielding during highly frequented periods," explained Hannah Struck, Senior Asset Manager at mrp hotels.
Despite the positive sales development, the economic pressure on the operator side remains high. High personnel and merchandise costs continue to weigh on earnings, even though individual cost items – such as energy costs – have recently eased slightly. Efficiency increases are therefore no longer short-term countermeasures, but part of everyday operations. "Operational efficiency and cost control have become central levers that must be the focus of attention at all times," says Struck. Against this background, close coordination between owners and operators is becoming increasingly important, especially with regard to performance transparency, CapEx prioritization and the long-term strategic positioning of the houses.
Stricter financing, new sources of capital and higher requirements for operators
The hotel real estate market remains liquid, but at the same time the requirements for financing and expansion strategies have become significantly more stringent. Francesco Fedele, CEO of BF.direkt AG, emphasized that projects today must be measured against realistic assumptions. "Relief from falling interest rates is not to be expected – projects must pay off with the current interest rate level," Fedele stressed. Traditional banks are still active, but act more selectively and with higher requirements in terms of equity, transparency and ability to service capital.
In addition, alternative financing instruments are gaining in importance. Private credit, structured investments and joint venture models are used where classic bank financing reaches regulatory or structural limits. "Private capital is not a substitute for banks, but a targeted complement – especially for more complex structures, platform strategies or turnarounds," Fedele explained. Clear governance and professional communication between investors, owners and operators are crucial.
From an operator's perspective, Erik Florvaag, CEO and Managing Partner of The Chocolate On The Pillow Group, referred to the continued high resilience of the hotel asset class. "A hotel in a good location always produces cash flow," says Florvaag. Insolvencies should therefore be understood less as a market weakness and more as part of a necessary market shakeout. Permanent business closures remained the exception, especially in good locations.
At the same time, Florvaag warned of an increasing tightening of operator contracts. Transparency and control are important for both sides – operator and investor – but must not lead to a restriction of entrepreneurial freedom. Sustainable growth is only possible with balanced contract structures and an understanding of partnership between investors, financiers and operators.
Professionalization is decisive for market success
The hotel real estate market will be characterized by greater professionalism and strategic clarity in 2026. "The market is back in a new reality – with less leverage, more structure and higher demands on all stakeholders," Catherine Szolar summed up.
Stability is still possible, but no longer a matter of course. "Capital is available, but it only flows into cleanly structured, professionally managed hotel concepts," says Szolar. For investors, operators and financiers who are willing to think holistically about the market, operations and financing, this continues to open up opportunities even in a challenging environment.
