European hotel values see modest rise in 2023 but fail to reach pre-pandemic levels, reveals HVS Valuation Index

Hotel values across Europe remained steady in 2023 according to HVS's annual European Hotel Valuation Index (HVI)
LONDON, March 11, 2024: Hotel values across Europe remained steady in 2023 buoyed by the consolidation of the post-pandemic recovery and a steady desire to travel keeping average room rates strong, according to the annual European Hotel Valuation Index (HVI) published this week by global hotel consultancy HVS.
These influences combined to off-set the impact of a number of geopolitical challenges including the war in Ukraine, the war between Israel and Hamas and the shaky Chinese economy as well as increasing operating costs, and high interest rates.
The result was a modest approximately 1% uplift in hotel values across Europe keeping them at around 97% of 2019 levels. This slowdown follows steady increases during 2021 and 2022 when the HVI reported value rises of 3.8% and 4.5% respectively.
Revenue and profit recovery still resulted in marginal gains in value over the year, despite the still challenging outlook on valuations parameters,” commented report co-author Julia Dzerkach, associate with HVS London, “but the elevated cost of debt in the first half of 2023 and the persisting macroeconomic challenges have resulted in a subdued market for hotel transactions, with a wide bid-ask spread for sales and acquisitions,” she added.
The year saw hotels in Paris, London, Zurich, Amsterdam and Rome remain the most highly valued across Europe with Geneva, Florence, Milan, Barcelona and Madrid completing the top 10.
Hotels in Athens experienced the strongest value growth in 2023, according to the HVI, with double-digit improvement prompted by strong RevPAR [Rooms Revenue per Available Room] and active interest from investors while Florence, Dublin, Brussels, Barcelona, Paris, Madrid and Lisbon saw value increases of between 3-5%.  However, only Amsterdam, Athens, Dublin and Paris saw values return to pre-pandemic levels, mostly driven by strong average rate performance.
The German markets of Berlin, Hamburg and Frankfurt were amongst those seeing a decline in hotel values for 2023, largely due to slower recovery of significant demand generators such as corporate demand, conferences, exhibitions and fairs business.
There’s still global uncertainty in the year ahead, but we should see more stability in terms of price changes moving forward. The prospect of declines in interest rates coupled with modest RevPAR growth as demand volumes completely recover, should bode well for 2024,” concluded report co-author Clemence Sennavoine, associate, HVS London. 
Over the past few years investors have adopted a ‘wait and see’ approach to hotel investment, meaning that substantial amounts of capital remain available and, as has been demonstrated again in 2023, hotels remain a strong investment option as a good hedge against inflation.” 
A copy of the full 2024 European Hotel Valuation Index by Clemence Sennavoine, Julia Dzerkach and Sophie Perret can be downloaded here.

For further information please contact:  

Linda Pettit, Tilburstow Media Partners         
[email protected]                            
Tel: +44 (0) 13 4283 2866. 
Mob: +44 79 7378 9853

Clemence Sennavoine, Associate
[email protected]
Tel: +44 (0) 77 3627 3439

Julia Dzerkach, Associate
[email protected]
Tel: +44 (0) 79 1224 0964

Sophie Perret, Managing Director
[email protected]
Tel: +44 (0) 77 2578 1037