The German hotel market saw investment activity drop substantially in the first half of 2026, though operating metrics remain steady, according to agent Cushman & Wakefield.

The drop off in investment deals was significant. In constrast with H1 of 2025, when deal volume added up to EUR1.1 billion, the similar period of 2026 saw just EUR600 million of transactions. International investors accounted for more than half of all deals, with high net worth individuals and private family offices leading, fancying the stability of German hotels as investment vehicles. Major investors, and hotel operators, were also active in the mix.

Investors Attracted to Leased Hotels

Just over two thirds of hotels sold had a lease contract in place, with 30% being sold with vacant possession, providing an opportunity for the buyers to upgrade the property and rebrand it in due course. German developer and investor Aroundtown was active, selling a portfolio of Pentahotels in locations including Bremen, Eisenach and Leipzig. Blackrock Investment bought the Excelsior Hotel in Munich, while another consortium picked up the Excelsior hotel in Berlin.

A Premier Inn hotel, part of a fast growing brand in the German market, also traded. The Premier Inn Rosenheim was sold by its developer S&P Commercial Development to investor Kingstone Investment Management, in a group deal that included adjacent office and commercial space.

One major happening in the German market during the first half of 2026 was the problems encountered by REVO Hospitality, which in January filed for self-administration insolvency. The company was the operator of a substantial portfolio of German hotels, owned by many different landlords and operated under a variety of international hotel brands, as well as its own brands including H2, Hyperion and Aedenlife. It had also worked closely with major brand groups such as Wyndham, where it had jointly grown the Vienna House brand in central Europe.

Inevitably, the impact of the business failure was substantial – though the market shake up did result in opportunities for some. Cushman & Wakefield note: “Several international hotel groups entered or expanded in the German market for the first time.” Among the beneficiaries were Leonardo Hotels, which signed deals to take on hotels in several German cities. Motel One, OYO, Proark, Dormero and Wyndham also took the opportunity to sign new hotels.

New Supply Drops Away

According to figures from the German Federal Statistical Office, the size of the German hotel market has actually shrunk in recent months. This suggests the volume of hotel closures is actually outpacing the rate at which new rooms are added to the market. This bodes well for operators in the short term, as they will be able to maintain room rates.

Average occupancy for the half year was up 1% to 65%, while room rates actually slipped slightly, report Cushman & Wakefield. However, a better second half is in prospect, with August revpar up 4.7%. On the horizon is a strong calendar of trade fairs, which always help drive hotel demand and encourage hoteliers to push up room rates.