German hotel investment volume halved to €600M in H1 2026 from €1.1B a year earlier, with the insolvency-driven break-up of the REVO Hospitality Group shaping the half-year more than any single transaction.

What drove the investment decline?

Transaction volume for the first six months of 2026 came in at approximately €600 million, compared with €1.1 billion in H1 2025. International investors still wrote more than half of the cheques, led by high-net-worth individuals and family offices. Institutional investors and hotel operators followed. The defining event of the period was the insolvency-driven break-up of REVO Hospitality Group, through which several international hotel groups entered or expanded in Germany for the first time.

How did operating performance hold up?

Operating metrics stayed broadly flat. Average occupancy rose one percentage point year-on-year to 65%, while ADR slipped 1.6% to €113. The combination produced an essentially unchanged RevPAR of €74, a marginal 0.1% gain. A stronger August reading — RevPAR growth of 4.7% — points to a firmer H2 2026 and suggests operators are regaining pricing power. German Federal Statistical Office data also shows hotel supply declining slightly, with closures outpacing new openings. That net contraction has kept competitive pressure contained and supported metric stability despite persistent macroeconomic headwinds.

Where do yields sit now?

Prime yields for hotels operated under hotel management agreements have held at roughly 6.5% since the end of 2023. Core assets continue to attract strong demand. Outside that segment, yield expectations have diverged sharply by location, asset quality and risk profile. Secondary locations now require buyers to demonstrate that operational value creation and CAPEX planning can sustainably support returns.

Who bought German hotels in H1 2026?

High-net-worth individuals and family offices set the pace, leading the international investor group that wrote more than half of total volume. Institutional investors and hotel operators split the rest. The hotel-operator cohort used the REVO process to enter or expand in Germany for the first time — a rare reset of the country's operator landscape in a single half-year, and one that should compress future competition for management contracts in core markets.

What changes for the rest of 2026 and 2027?

Operators and investors should watch three near-term drivers. First, the REVO asset pipeline is still feeding transactions; further deal flow is expected in H2 2026 as the break-up completes. Second, the August 4.7% RevPAR uplift sets a higher base for H2 pricing and could pull full-year RevPAR into clearer positive territory. Third, the return of several major biennial and triennial trade fairs in 2027 should lift corporate travel demand and ADR growth across Germany's key hotel markets. A stabilisation of investment volumes above the €600M H1 floor, combined with modest RevPAR growth, is the most likely base case heading into the 2027 fair cycle.