By Elena Vasquez

Cushman & Wakefield expects European hotel investment to ramp up in 2025, with the Iberian Peninsula, Italy and France identified as the top targets for capital deployment across the region.

The property advisor's outlook positions Southern Europe at the front of the recovery in hotel transaction activity, as investors rotate back into hospitality assets after a constrained financing period. Spain and Portugal, Italy and France top the firm's ranking of preferred markets for the year ahead.

Why the Iberian Peninsula leads the target list

The Iberian Peninsula combines the strongest leisure demand dynamics in Europe with a deep pool of assets across both full-service and resort segments. Operators and investors have spent the past three years repricing Iberian hotels on the back of record occupancy and rate performance in Madrid, Lisbon, Barcelona and the coastal resort belts.

Cushman & Wakefield's designation of the peninsula as a leading target signals where it expects transaction volumes to concentrate in 2025. For owners, that means competitive tension around trophy urban assets and well-located resort stock. For operators, it signals franchise and management-contract opportunities as buyers without platforms seek brands for acquired properties.

Italy and France follow in the capital queue

Italy ranks second in the firm's targeting. The market continues to attract interest on the strength of Rome, Milan and the secondary city pipeline, where limited new-build supply constrains competition for existing hotels.

France, Europe's largest hotel market by room count, completes the top tier. Parisian assets and regional full-service hotels remain the core draw for institutional capital.

What does the outlook mean for operators?

An investment ramp-up translates directly into deal flow. Owners weighing exits in the three named markets face a widening buyer pool in 2025. Operators with brands positioned in leisure-led and Southern European markets stand to gain portfolio additions through conversion.

For lenders and investors, the outlook marks a shift from the caution that dominated 2023 and 2024, when financing costs suppressed transaction volumes and pushed deal structures toward asset-light formats. A return of appetite for the Iberian Peninsula, Italy and France suggests underwriting has loosened and bid-ask spreads have narrowed.

The ranking also carries implications beyond the named markets. When capital concentrates in three countries, owners in Germany, the UK and the Nordics face a thinner pool of competing bidders, which can weigh on achievable pricing. Cross-border operators will watch whether the 2025 momentum spreads north or stays bottled in the South.

What happens next

Deal announcements in Madrid, Lisbon, Milan and Paris through the first half of 2025 will test the forecast. Watch for Cushman & Wakefield's subsequent transaction data releases to confirm whether committed capital converts into completed volumes, and whether resort and secondary-city assets attract the follow-on demand the outlook implies.