AnnaStills/Envato
Hotel investment volumes in Germany reached €1.32 billion in 2024, according to new figures from Christie & Co—up by 10% year-on-year, but still less than a quarter of the 2019 peak of €5.4 billion. Average key prices dropped sharply to €147,000, down from €207,000 in the pre-pandemic boom. While investor sentiment improved markedly in the second half of the year, and international capital re-entered in force, institutional players remained largely absent from the field.
“The market is picking up speed and is well on the road to recovery,” said Alexander Apitzsch, a consultant at Christie & Co. Deal activity rose in the upper and luxury segments, while the highest number of keys changed hands in the economy bracket. Opportunistic capital led the way—private equity, family offices, and owner-operators dominated transactions, with asset-light international operators consolidating aggressively. Institutional investors, by contrast, remained cautious—held back by financing conditions, capex liabilities, and a still-gaping mismatch between buyer and seller expectations.
Two-thirds of capital invested in hotel real estate in 2024 came from abroad. Notable cross-border deals included BC Partners and Hova Hospitality acquiring 30 Accor hotels in Germany, now leased to B&B, and IHG’s acquisition of the Ruby Hotels brand for €110.5 million. The British chain plans to expand Ruby’s European footprint from 20 to 250 properties over the next two decades. “Ruby gives us access to the Urban Micro segment and strengthens our ability to reposition existing buildings,” IHG said at the time of the deal.
Foreign groups expanding through franchising and takeovers
Other foreign players are stepping up expansion through franchising and asset takeovers. Wyndham grew its German footprint via HR Group’s acquisition of the Centro portfolio, now integrated under the Vienna House Easy and Trademark Collection brands. The French group B&B, now owned by Goldman Sachs, took over 30 Ibis Budgethotels from Accor. SV Hotel, partnering with Vastint, took on six Marriott-branded hotels across four German cities.
Premier Inn is now clearly outpacing Motel One in its home market. By March 2025, the UK-based operator had signed its 100th hotel project in Germany, announcing plans to reach 20,000 rooms across 120 hotels by 2030. “We expect the coming financial year to be profitable,” said Erik Friemuth, head of Premier Inn Germany, following a turnaround from early losses. The company’s revised distribution strategy—embracing online portals such as Booking.com—has driven occupancy to 70.1%, with average rates of £71.78 (€85.50) per night.
Motel One, by contrast, suffered a pre-tax loss of €51 million in the first nine months of 2024, due in part to €67 million in fees and legal costs from buying back a 35% stake from Proprium Capital. Its €1.3 billion refinancing carries €74 million in annual interest charges. PAI Partners has now taken an 80% stake in the operating company, valuing the business at €3.5 billion. Founder Dieter Müller remains at the helm and will continue to steer its international expansion.
The serviced apartment segment continues to attract investor attention, with limehome surpassing 10,000 units and signing new developments in Cologne, Stuttgart, Madrid and Barcelona. “From an investor's perspective, serviced apartments offer more flexibility and more stable returns over the long term than traditional hotel properties,” said limehome CEO Josef Vollmayr. The firm is focusing on ESG-compliant redevelopment of office assets into design apartments, working with developers such as GARBE and the WATZL Group.
Market remains fragmented, with post-COVID hangover
On the operational side, the German market remains highly fragmented. Operators face rising cost pressures, persistent labour shortages, and post-pandemic lease complications. “Room revenues have not grown nearly as much as costs,” said Claudia Sunderkamp of Hotour Hotel Consulting. Indexed rents, minimum wage increases, and soaring energy and food prices have compressed margins, especially for staff-intensive three- and four-star hotels.
“Some operators are now in their fifth difficult year,” said Martin Schaffer, partner at MRP Hotels. “The banking and investment capacity of many is questionable.” Deferred rents and underperforming F&B operations continue to weigh on full-service hotels. Franchise models are under renewed scrutiny, particularly white-label operators. “Now is the time again to take a close look: who is the right partner? Who has creditworthiness?” said Thorsten Faasch, Hilton’s head of development for the DACH region.
Meanwhile, leaner concepts—serviced apartments, budget premium brands, and lifestyle hotels—are outperforming. “These hotels are still the first to be fully booked,” said Moritz Dietl, Managing Director of Treugast. The most robust segments remain at the high and low ends of the market: luxury properties, whose guests are less price-sensitive, and budget hotels with low operating costs.
JPI Hospitality, planning €300 million in hotel investments across Europe, is focused on urban lifestyle and leisure hotels. “The right time is when you make the right deal,” said Managing Partner Gebhard Schachermayer. He sees potential in properties coming to market as owners exit under pressure. “Some people will run out of money and have no other choice but to sell,” said Schaffer. Major valuation firms have now applied 10–20% downward corrections.
Outlook for 2025 remains wary on financing availability
Looking into 2025, the mood is described as “cautiously optimistic” across the sector. A panel hosted by MRP Hotels found operators upbeat on tourism fundamentals but sober on financing. “We’re in the fifth exceptional year in a row,” said Schaffer. “The first two and a half were dominated by COVID, the next by interest rate shocks.”
European tourism indicators are encouraging. According to UNWTO, international arrivals in Europe rose 1% above 2019 levels in 2024. Domestic leisure demand remains robust. “People are not cutting back on holidays,” said Matthias Reith of Raiffeisen Research. But the investment pipeline is still restrained. Most expect the second half of 2025 to bring increased transactions, but deal volume will depend on seller realism, operator stability, and debt availability.
As for growth potential, Germany’s major cities are no longer the only focus. “There are still many blank spots on the map,” said Tobias Gollnest of B&B Hotels. The group plans to grow its German portfolio from 224 to over 400 hotels. “It’s not just about Munich or Berlin—we’re talking about fitters, tradespeople, and managers in B-locations. The clientele is very broad.”
In the meantime, the core issue remains unresolved. Capital is available, operators want to grow, and tourist demand is strong. But until pricing expectations adjust and lease structures stabilise, Germany’s hotel investment market will continue to move—just not at full speed.