Deloitte: Athens Among Top 10 European Hotel Investment Hotspots

Athens, Greece, is among the ten most attractive European cities for hotel investment in 2025, found a survey released by Deloitte on Wednesday .

According to the 2024 European Hotel Industry and Investment Survey by Deloitte, the Greek capital now ranks 10th for hotel investments in Europe, up from 11th the previous year. In Deloitte’s 2022 survey, Athens ranked 9th most attractve city for hotel investments in Europe.

Source: Deloitte

In the survey, conducted from August 7 to September 17, 2024, nearly 100 senior hospitality leaders, including hotel owners, lenders, developers, and investors, shared insights on the trends shaping the hospitality industry in 2025.

For the second year in a row, respondents rated London as the most attractive city in Europe for hotel investments in the coming year.

London is followed by Paris and Madrid, which moved up to second and third place, respectively. Amsterdam dropped to fourth, while Porto joined the list for the first time, ranking 12th.

In the UK regional market, Edinburgh continues to be the most attractive city for hotel investment for the fourth consecutive year, with 54 percent of respondents ranking it first. Oxford followed in second place at 25 percent, and Manchester took third at 22 percent, while Birmingham climbed three places to become the fifth most attractive UK city for investment in 2025.

European outlook and investment cycle

The survey indicates a mixed outlook across Europe. While the investment cycle in the UK and Ireland is trending upward, key Western European markets, including Germany, France, and the Netherlands, are experiencing a downturn. In Southern Europe, sentiment remains largely positive, with Spain and Portugal showing growth, and Italy becoming more optimistic. Greece, however, is showing signs of entering a downturn, according to the survey results.

European investment opportunities

In Europe, hotels continue to be the most attractive asset class for investment in 2025, with branded residences also drawing significant interest. Hostels have gained popularity as an investment option, showing a six percent increase in appeal compared to last year.

Source: Deloitte

Mergers and acquisitions (M&A) are expected to rise, with 70 percent of executives predicting increased competition for hotel acquisitions. Over half of the respondents (54 percent) plan to make acquisitions, while around two-thirds (62 percent) are prioritizing strategic partnerships, joint ventures, and acquisitions in high-growth markets and key destinations.

When asked about the most promising hotel segments for 2025, 24 percent of executives pointed to the upper-upscale segment, followed by luxury (22 percent) and economy (17 percent).

“M&A activity is picking up and hotels remain by far the most popular investment class, but we’ve also identified the increasing attractiveness of hostels as an investment asset across Europe in the year ahead too,” said Leila Jiwnani, Head of Hospitality & Leisure Advisory at Deloitte. “Luxury-focused investments are expected to increase, aligning with demand for premium experiences, although this emphasis may risk sidelining mid-range hotels.”

According to Jiwnanim private equity funding for hotel investments has rebounded, rising by ten percentage points, reflecting a “growing appetite” for M&A. “However, while hoteliers continue to refine and manage their portfolios, many remain focused on strategic growth and consolidation rather than aggressive diversification,” she added.

Hospitality industry remains cautiously optimistic

Photo source: Deloitte

Despite these positive developments, industry leaders remain cautious, according to the survey.

Rising costs (79 percent), labor challenges (77 percent), and high interest rates (71 percent) are seen as key risks to the industry’s growth.

Additionally, concerns about overtourism have escalated, with 28 percent of executives now citing it as a pressing issue, marking a notable increase from last year.

Looking ahead, 88 percent of hotel industry leaders see cash flow management as a top priority for the next year, followed closely by maintaining or increasing profitability and handling inflation (each at 86 percent).