DACH (Germany, Austria And Switzerland) Region Hotels & Chains Report 2025

Germany and Austria have had to contend with sluggish growth, high energy costs, and persistent inflation, while broader geopolitical uncertainty – from international trade tensions to the ongoing war in Ukraine – continues to weigh on sentiment. Switzerland, by contrast, has remained comparatively stable.

The past year has highlighted both the challenges and the resilience of the DACH hospitality sector.

Germany and Austria have had to contend with sluggish growth, high energy costs, and persistent inflation, while broader geopolitical uncertainty – from international trade tensions to the ongoing war in Ukraine – continues to weigh on sentiment.

Switzerland, by contrast, has remained comparatively stable, supported by strong domestic demand and its position as a high-value global destination. These differing dynamics illustrate the complexity of the region but also underline its importance as one of Europe’s most resilient markets.

Despite these pressures, tourism across the DACH region has reached a symbolic milestone: overnight stays in 2024 not only grew by 2.0% year-on-year but also surpassed pre-pandemic levels for the first time. This achievement confirms the enduring appeal of the region’s cities, landscapes, and cultural offerings, and highlights the adaptability of businesses in responding to shifting patterns of demand.

At the same time, the structure of the hotel market is evolving rapidly. Branded hotels now account for more than a third of total room supply, with the largest cities — Berlin, Munich, Vienna, Hamburg, and Frankfurt/Main — concentrating the majority of chain capacity. Growth continues to be strongest in the economy and upper midscale segments, reflecting both consumer price sensitivity and investor appetite for efficient, scalable models. Meanwhile, serviced apartments are gaining ground, offering modern products that bridge the gap between hotels and residential living. These shifts show how the industry is reinventing itself to stay relevant and competitive.

Another defining theme of the past year has been consolidation. Landmark transactions such as PAI Partners’ acquisition of Motel One and IHG’s integration of Ruby Hotels and franchise deal with Novum reflect a wave of mergers and partnerships reshaping the market. Wyndham’s expansion through Vienna House Easy and Trademark Collection, as well as portfolio deals like those by Chocolate on the Pillow and SV Group, further demonstrate how scale and brand alignment are becoming decisive factors for long-term success. These deals signal confidence in the future of the region, even amid uncertainty.

For investors, operators, and owners, this environment presents both opportunities and risks. High costs, staffing shortages, and cautious consumer spending remain challenges, but the fundamentals of the market — strong demand, diverse destinations, and increasing professionalization — provide reasons for optimism.

The DACH region has once again shown that it is not only capable of weathering storms but also of adapting in ways that strengthen its long-term position.

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DACH Region Hotels & Chains Report 2025