European hotels to resume long-term trend of strong annual growth

The European hotels sector will resume its long-term trend of strong annual growth as the market recovers from the impact of COVID-19, according to a new study by Invesco Real Estate. As such, the repricing seen in European hotels during the past two years represents a strong opportunity for investors to acquire either core hotels for a long-term hold or undertake value-add projects as part of a manage-to-core strategy. This is in contrast to the European office, logistics and residential sectors, notes the firm, further increasing the relative yields from hotels.

David Kellett, senior director, head of hotel transactions at Invesco Real Estate, said, “We see a clear benefit from investing into hotels. We expect the post-COVID recovery to be led by leisure visitors initially with business travel following, with our analysis suggesting that cities with a higher share of leisure demand with a limited pipeline of new supply will recover quickly.”

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