Germany’s hotel market enjoyed a strong recovery in 2025, with investment volumes up 50% year on year – despite softer than expected operational performance.
Around EUR1.9 billion of hospitality assets changed hands during the year, according to agents Cushman & Wakefield, with the most desirable segments of the market being prime urban hotels, and leisure assets. With properties in city centres attracting strong bidding, other investors looked to secondary locations, and for properties with a value-add opportunity, as a way to deliver better investment returns.
An Improving Operational Performance
For full year 2025, operating performance was slightly down. Although average occupancy was up 0.7% on the previous year, at nearly 68%, it was achieved at the expense of slightly lower average room rates, down 1.8% on 2024 levels. Looking ahead into 2026, researchers at Cushman & Wakefield expect continuing good occupancy levels, and a “robust” operating performance.
The researchers say that, overall, the German market will continue to perform well due to a modest pipeline of upcoming new market additions. As ever, there is still plenty of development activity in the country’s main conurbations, such as Berlin and Hamburg.
In Berlin, the next year will see the opening of several internationally branded properties. These include the Clayton Hotel Tiergarten and, at the airport, a 271 room Ramada Encore by Wyndham. Motel One will be opening the 344 room Forty4 – The Cloud One Berlin, an opening for its new premium brand that was launched in New York.
Numa will add hotels in Berlin Mitte and Berlin Koloniestrasse later in 2026. While IHG is growing its presence in the city with projects including the 375 room Ruby Berlin, and a planned Voco hotel in Berlin Mitte.
One significant addition to the German landscape will be more hotels from Scandinavian group Scandic, which likes the fundamental strength of the German market. In late 2026, it will open Scandic Charlottenburg, while in Hamburg there are two live projects, set to deliver over 750 rooms for the brand. The first of these, Scandic Hamburg St. Georg StadtKontor, will open in 2028.
Strong Key City Markets
And Hamburg is another busy city market with a strong pipeline. Aside from traditional hotel brands, there is also a growing lifestyle offering. The Hoxton Hamburg will open in early 2027, while the 191 room Hyatt Centric Monckebergstraße will be ready around the same time. Marriott is also adding Moxy Hotel Hamburg Alstertwiete, bringing its most playful brand to the city.
Among the businesses expanding fast in Germany is Whitbread, which is opening Premier Inn hotels at pace. In March 2025, it signed its 100th hotel in the country, and in October agreed a portfolio deal to add eight properties formerly leased by Gorgeous Smiling Hotels, in several towns in Germany and Austria. At a stroke, that deal added 1,538 rooms to the portfolio.
