Boutique and lifestyle hotels booming, investors set their sights on suburban locations

The European tourist industry is booming. In 2018, Catella Research counted more than 3.1 billion overnight stays in Europe, an increase of 2.2 percent compared with the previous year.

As an asset class, hotels remain popular with investors. In 2018, hospitality property transaction volume in Europe came to approximately €23 billion ($26 billion). Boutique, lifestyle and economy hotels are increasingly entering the market to cater to users’ needs. According to Catella Research, more than 4,500 hotels are currently being constructed or planned in Europe — initial signs of crowding-out can be seen and suburban locations are becoming more popular.

In terms of the analysis of global transaction volumes, hotel investments are still in fourth place — after office, residential and retail properties. Regarding European hotel investment, the most capital was invested in the United Kingdom in 2018, at approximately €7.7 billion ($8.7 billion). Germany was in third plac