The 2025 European Hotel Industry and Investment Survey
The European hotel industry presents a mixed picture: luxury markets facing oversupply, significant cost pressures from regulatory changes, regional performance disparities, but also continued investment and expansion in certain segments and geographies.
In our latest European Hotel Industry and Investment survey report, hotel operators and investors share their views on the industry’s risks and expected performance for 2026. They also discuss their priorities and business strategy for the year ahead, including which hotel segments are most attractive, M&A expectations, how to diversify and where they are in their digital transformation journey.
The survey results reveal trends and highlight changes compared with last year. Please contact us to receive the full report and we hope you find the insights from this research useful.
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Key survey findings
- Positive outlook but profitability is a challenge: Executives have a positive view of the long-term outlook for the European hotel markets, but maintaining or increasing profitability has become the top priority this year. Labour and workforce challenges remain the industry’s number one risk in the year ahead.
- Digital transformation and AI surge: There is a fast-growing focus on investing in smart technology and automation both for cost optimisation and to better serve guests.
- M&A activity cools: The data also points to a possible slowdown in the pace of M&A activity. ‘Growth through acquisitions’ has dropped in the priority ranking this year.
- New source of equity focus: when considering source of equity capital for UK hotel acquisitions, compared with last year fewer respondents selected ‘Private equity’ but ‘Family offices’ is expected to see a significant increase in 2026.
- Diversification or profit vs capital: When it comes to diversifying, while profit margin pressures and the need to improve ROI are the main drivers, the need for large capital investment is the main barrier.
- London and Edinburgh lead investment: In terms of expectations for market performance, in the UK, established tourist and business hubs continue to attract investment with Edinburgh still the most attractive city for the fifth consecutive year. London remains the most attractive European city for hotel investment in 2026.
About the survey
These are the key findings from the 2025 European Hotel Industry and Investment survey, Deloitte’s annual survey of executives in the hospitality industry, for their views on the industry’s performance in the year ahead. The survey took place between 6 August and 26 September 2025 and was conducted online with 100 executives including owners, operators, lenders, developers and investors.
How Deloitte can help
At Deloitte we combine deep industry knowledge with extensive advisory experience to help clients navigate the complexities of the European hotel market. Whether you are looking to optimise profitability, explore diversification strategies, implement digital transformation, or understand the implications of evolving market trends, our team will provide tailored insights and solutions.
Contact us to explore how these insights can inform your investment priorities, operational planning and long-term growth strategy.
