European hotel investment exceeded €20 billion in the current cycle, with Italy alone forecast to absorb €2.5 billion in 2025, executives told the inaugural Real Estate & Hospitality Summit held yesterday at Hotel Villa Pamphili in Rome.

The figure, disclosed across panel sessions at the Il Sole 24 Ore event, marks an all-time high for European hospitality deal flow and confirms the sector's resilience against an unsettled geopolitical backdrop. Italy ranks among the most active southern European markets.

Why are family offices driving the deal flow?

Capital composition has shifted away from core institutional investors and large German pension funds. Family offices now provide around 30% of investment into European hotels. "The most significant change is the rise of family offices, which are increasingly entering the sector and now account for around 30 per cent of investments," said Ofer Arbib, CEO of Colliers Global Investors Italy Sgr.

A second structural change comes from residency flows. "What's new compared to the past is that more and more people are choosing to take up residence on the continent, bringing their assets and capital with them. This trend is also driven by tax advantages," said Giuseppe Amitrano, founder and group CEO of Dils.

How large is the renovation runway in Italy?

Europe has approximately six million hotel rooms, of which one million sit in Italy, according to Gaël Le Lay, CEO and co-founder of Petra-Hova Hospitality. Most Italian properties remain family-run and have not undergone significant refurbishment, a condition he calls a "major opportunity."

Unicredit's industry real estate head Lorenzo Vianello quantified the chain gap: of about 32,000 hotels in Italy, only 6–7% belong to international chains or brands. He framed the imbalance as an opportunity for stock renewal, not an oversupply problem.

Mario Ferraro, CEO of Smeralda Holding and vice-president of the Costa Smeralda Consortium, pointed to supply constraints elsewhere. "There are few trophy assets in Italy, opportunities for new builds are limited and the cycle of conversions is gradually coming to an end," he said, adding that "investing in the hotel sector continues to make sense" given rising tourist arrivals.

What is the next wave of asset strategies?

Operators are widening the funnel toward secondary destinations and hybrid formats. Paolo Barletta, CEO of the Arsenale Group, argued for multimodal distribution: "With trains, we can reach a wider audience and connect better-known destinations with lesser-known ones."

Donato Piscuoglio, head of real estate at Arrow Global Italia, singled out resorts and seasonality. "The value of the asset can increase by extending the tourist season," he said, listing Sicily as a territory with "enormous potential" the group is actively developing.

What comes next for the European hotel cycle?

Regulatory uncertainty and the rigidity of land-use restrictions remain the chief drags on conversions and on the roll-out of branded residences. The summit's hosts, Il Sole 24 Ore editor-in-chief Fabio Tamburini and group chair Maria Carmela Colaiacovo, closed on the need to support sector growth through clearer permitting rules.

Investors will watch the next 12 months for evidence that family-office capital and refurbishment flows translate into signed transactions above the €20 billion mark, with Sicily and other secondary Italian destinations the early indicators of where the cycle heads next.