The European hotels sector will resume its long-term trend of strong annual growth as the market recovers from the impact of the COVID-19 crisis.

A new study by Invesco Real Estate argues that the repricing seen in the European hotel market over the past two years represents a strong opportunity for investors. This could take the form of either acquiring core hotels for a long-term hold, or undertaking value-add projects as part of a manage-to-core strategy.

As the major hotel companies continue to deal with the pandemic and pursue asset-light growth, Invesco Real Estate believes niche operators and specialist brands will be attractive acquisition targets, with further consolidation likely. Brands that meet a clearly identified consumer need, ideally with a global loyalty programme, can be successful, but the firm remains cautious on investing in new brands and those without relevant scale. Hotels in micro-locations that benefit from the recovery trends combined with a