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Private Equity

European Hotels

Targeting areas of distress in the European hotel sector to unlock and create value.

European Hotel strategy differentiators

  • Experience
    Dedicated team of hotel specialists, established and active in the market since 2011. Executed over €1.6 billion in transactions, managed 27 hotels across 8 European countries, renovated 17 hotels.

  • Knowledge
    Deep understanding of hotel sector trends across Europe. Experience in strategic renovation, refurbishment, and repositioning process.

  • Connected
    Vast network on the ground across Europe provides direct access to owners, developers, and brokers, delivering an advantage in sourcing and analysing investment opportunities.

  • Sustainability Commitment
    Investing based on a commitment to minimizing assets’ environmental footprint, enhancing climate resilience, focusing on health and wellbeing, engaging key stakeholders and partners on sustainable performance, and designing and operating sustainable buildings to meet the requirements of sustainably conscious hotel guests while seeking to deliver positive financial and sustainable outcomes.

Long-term fundamentals for European hotels are strong

1:29 min

The opportunity for investors

  • Exposure to a sector with robust underlying fundamentals—despite stress caused by the pandemic, long-term demand for hotels remains very strong, underpinning future growth.

  • Hotel sector income growth has historically outpaced inflation.

  • Hotels currently offer an attractive yield premium over traditional real estate asset classes.

  • Hotel real estate has shown a high degree of liquidity.

Investment drivers
Hotel entrance
  • The European hotel industry is experiencing a strong recovery after the pandemic, with +28% RevPAR over last 12 months vs. 2019.1
  • Europe is forecast to see a 49% increase in visitors by 2026 compared to 2022.2
Hotel on the water
  • Highly fragmented market where majority of hotels are independently owned and operated, and which are operationally underperforming and historically underinvested.
Entering a hotel room
  • Market stress has created a window of opportunity to acquire hotels at discounted pricing and create value at both asset and operational levels through investment in repositioning, upgrading, and rebranding.

Portfolio management

Principal Real Estate

Our European platform delivers access to diversified and sector-specific strategies. We’re able to access real-time market information, track deal flow, and understand regional market dynamics with our team of local transaction professionals across Europe and offices in the United Kingdom, Germany, France, Spain, Portugal, Italy, Luxembourg, and the Netherlands.

Director, Fund Management – Hotels & Leisure Division
Graeme McCormack
20 years of experience
Director, Asset Management – Hotels & Leisure Division
Hugo Steen
14 years of experience
Learn more

Get the latest insights.

1 STR, June 2023. RevPAR (revenue per available room) in the 12 months to March 2023 vs 2019.

2 European Travel Commission, July 2023.

These current views, opinions, and conclusions are subject to change. There is no guarantee that such opportunities with the hotel sector will continue, and reliance upon this information is at the sole discretion of the reader.

Past performance does not guarantee future results.

Real estate investment options are subject to risks associated with credit, liquidity, interest rate fluctuation, adverse general and local economic conditions, and decreases in real estate values and occupancy rates. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards.

Principal Real Estate is a trade name of Principal Real Estate Investors, LLC, an affiliate of Principal Global Investors.