14th Investment Barometer by Union Investment and HospitalityInside
Operator quality determines the long-term success of a hotel property
More than ever before, the quality of the hotel operator is regarded as a decisive factor in the long-term success of a hotel property. This is the conclusion reached by the trade magazine HospitalityInside and the property manager Union Investment in their joint autumn survey of European hotel experts.
55 per cent of those surveyed consider the operator to be of crucial importance to the quality and return on investment of the property. A further 45 per cent also regard the choice of operator as important, but see the location as the more significant factor.
“An effective operator can not only ensure operational quality, but also make a significant contribution to the stability of income and, consequently, to long-term value growth. The choice of operator should therefore always be assessed in conjunction with the location, the quality of the property and its market positioning,” says Andreas Löcher, Head of Investment Operations at Union Investment.
The survey paints a mixed picture of the investment potential of hotels in smaller markets: 65 per cent of industry experts rate the potential as moderate – offering attractive opportunities, but also carrying specific risks. 17 per cent see very high investment potential in smaller markets, particularly due to lower competition and growing demand. 10 per cent, however, rate the prospects as low, as they prefer major cities as investment locations.
“Smaller hotel markets are not a sure-fire success. However, upon closer examination, selected locations do offer attractive opportunities. Key factors include a robust demand base, a realistic assessment of the competitive environment and an operational concept suited to the respective market. The fact that the majority of experts rate the prospects as ‘moderate’ – meaning they are promising but also carry risks – reflects the need for a nuanced assessment of such locations,” says Andreas Löcher.
As the survey shows, sentiment in the hotel sector has cooled in autumn 2026. All four sub-indices have fallen compared with the previous year, whilst the overall index has dropped by 270 points (−8 per cent) to 2,948. Expectations for the next six months and sentiment regarding hotels’ revenue performance have seen the sharpest declines. The Development Index has fallen less sharply and remains above the figures recorded between 2022 and 2024. Respondents cite rising costs, pressure on margins, more expensive financing, geopolitical uncertainty and unstable demand as the reasons for this.
