Christina Choueifaty of STR writes that Investment in Southern Europe’s hotel industry is flourishing with a significant pipeline of 1,142 hotels accounting for 126,977 rooms, of which 34,016 are slated to open between April and December 2025.
Italy’s luxury hotel development is expanding beyond key cities, with investors increasingly drawn to secondary locations like Sicily and Tuscany. This shift is attributable to government subsidies, improved infrastructure, and a growing desire for authentic travel experiences. This trend signifies a maturing market where investors enrich Italy’s overall tourism experience by embracing a broader range of locations.
Portugal’s tourism sector has shown impressive growth, with arrivals from the U.S., Canada, and Poland propelling this trend. The Algarve and Lisbon regions have a robust pipeline of 129 hotel projects, emphasizing branded hotels, particularly in the Luxury and Upper Upscale segments. The Portuguese government’s new tourism strategy focuses on sustainability and environmental priorities, aiming to position Portugal as a leading sustainable tourism destination.
Greece is gaining traction as a destination for resort hotel investment. The country’s hotel pipeline includes over 50% resort rooms, presenting unique challenges and opportunities for private equity firms to play a significant role in financing these developments. This investor focus shift reflects the evolving dynamics of the resort hotel investment market.
France’s hotel industry continues to attract substantial investment, with a noticeable shift toward secondary cities like Nice, Lyon, and Marseille. These cities offer robust MICE markets and improved transportation infrastructure, making them increasingly attractive destinations. Their relative affordability compared to the increasingly expensive Parisian market further incentivizes investment.
Spain’s hotel investment market is witnessing robust activity, with secondary markets in Andalusia, Valencia, and the Murcia Region boasting higher room counts and more significant development in the proportion of existing rooms than in Madrid. Early-phase development activity has slowed significantly in Barcelona due to moratoriums on new development.
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