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Hotel de Rome, Berlin
Germany’s hotel market is no longer constrained by demand. What now determines whether assets transact, refinance or stall is the cashflow structure. That was the central takeaway from mrp hotels’ latest quarterly webinar, attended by REFIRE, which made clear that financing has moved from a downstream consideration to the decisive filter for hotel real estate in 2026.
According to Catherine Szolar of mrp hotels, debt is no longer a standardised product. Financing today is a structured process in which lenders and investors focus less on brands and more on governance, transparency and the durability of operating cashflows. Capital remains available, she stressed, but only for cleanly structured setups with credible operators.
That shift is already visible in transaction activity. The investment market has not collapsed, but it has become highly selective. Landmark assets and well-positioned core hotels continue to trade, particularly where international or family-office capital is involved. Elsewhere, deals only clear when operating models, contract structures and financing assumptions align. Price alone no longer carries a transaction. In that environment, performance still matters — but only insofar as it translates into financeable margins once operating realities meet capital markets.
Performance remains solid, margins set the tone
Performance data from Hannah Struck at mrp hotels explains why lenders remain engaged, but cautious. Portfolio figures for 2025 show further improvement in RevPAR and GOPPAR, driven primarily by rate growth rather than occupancy. Energy costs have eased, helping margins stabilise, but payroll costs continue to rise and profitability pressure has become structural rather than cyclical.
For financiers, that combination has quietly shifted underwriting logic. The focus is no longer on peak trading years, but on how assets behave under sustained cost pressure. Hotels that demonstrate disciplined revenue management, operational efficiency and transparent reporting remain financeable. Those relying on volume recovery alone do not.
From the financing side, Francesco Fedele, CEO of BF.direkt, pushed back against the idea that banks have retreated wholesale from hotels. Senior debt remains available for standing assets with transparent operating histories and credible operators. What has changed is the equity requirement and tolerance for complexity. Higher interest rates and tighter regulation mean sponsors must bring more equity to demonstrate debt service capability. Relief through falling rates, Fedele warned, should not be assumed.
Private debt, in this environment, is not replacing banks but complementing them. Fedele described it as a tool for specific situations: speed-driven acquisitions, portfolio transactions, refinancing bridges and insolvency-related restructurings. These structures come at a higher cost, but address situations banks cannot. For hotel real estate, private credit has become tactical rather than default.
Operator perspective reinforced that point. Erik Florvaag of Chocolate on the Pillow, which operates around 30 franchise hotels in the DACH region, said bank appetite for existing hotels can be surprisingly strong, with multiple lenders competing for well-run assets, albeit at lower loan-to-value ratios than in the past. The real bottleneck, in his view, lies in development. New-build projects rarely stack up under current construction costs and rent assumptions, making them difficult to finance on any terms.
Florvaag also addressed concerns that recent operator insolvencies could undermine lender confidence. Hotels in good condition continue to generate cashflow, even under stress, and insolvencies tend to lead to restructurings rather than asset obsolescence. Compared with offices or retail, he argued, hotels retain a core advantage: they keep producing revenue, provided the operating model is sound.
Financing discipline now defines the market's limits
A recurring theme throughout the webinar was transparency. Fedele argued that financing today depends on full visibility into operator figures, systems and reporting quality, not merely contractual guarantees. Florvaag urged investors to scrutinise operational competence rather than balance sheets alone. The quality and speed of reporting, he suggested, reveal more about risk management than headline financials.
One further shift matters for financing dynamics. Traditional German institutional buyers remain cautious, while foreign capital appears less sceptical of Germany’s hotel market than domestic participants. Both Fedele and Florvaag pointed to growing interest from international and value-add investors, including private equity platforms comfortable with operating risk and flexible capital structures.
What emerges is a hotel market where demand is no longer the limiting factor. Financing remains available, but only for assets that already function operationally and structurally. Leverage is lower, equity has regained importance, and operator risk has become a hard variable in credit decisions rather than a secondary consideration. Hotels are not unfundable — but the latitude once granted by lenders has narrowed sharply, and the margin for error has gone with it.