CBRE has released its inaugural European Hotels Destination Index – a deep-dive, data-driven analysis of the top 66 hotel investment markets across Europe.
The review scores destinations across a range of key structural market pillars, macroeconomic fundamentals and certain qualitative attributes of appeal.
London tops the Index with a composite score roughly 25% higher than any other destination, underpinned by size, demand, and liquidity. Paris follows, supported by visitor volumes and strong revenue per available room (RevPAR) performance. Together, these two capitals define Europe’s most investible hotel markets.
Southern Europe accounts for nearly half of the top 30 destinations, led by Spain, Portugal, and Italy. Madrid, Barcelona, Lisbon, and Mallorca post visitor volumes 20-30% above the continental average, while Rome, Milan, Venice, and Florence outperform on demand and pricing power despite moderate liquidity. Interestingly, Mallorca outscores Paris in terms of market size. Other leisure islands such as Tenerife and Gran Canaria also rank in the top quartile, reflecting sustained rate growth and constrained new supply.
Smaller lifestyle cities including Florence, Venice, and Athens continue to outperform what might be expected for their size, combining high visitor density, premium RevPAR, and limited pipelines to deliver strong investor appeal. Across all destinations, inbound arrivals and total overnight stays explain nearly 70-80% of Index performance, reinforcing the link between tourism vitality and investment confidence.
Kenneth Hatton, Head of Hotels, Europe at CBRE, said: “The Index should be a great new reference point for investors seeking a data-driven analysis of markets that suit their investment thesis. Its strength lies not only in its foundations of deep historical data, but also the forward-looking projections of the key sector economists.
“While the major gateways will come as no surprise, it’s refreshing to see some disruptors to the traditional narrative. Going forward, I expect the annual updates should be an essential reference point for the evolution of investment plans.”
