H1 – Germany Hotel Market Analysis 2025
Germany’s hotel market is entering 2025 with greater stability after a turbulent few years. In 2024 transaction volumes rose sharply: according to a Business Outlook review by hotel advisers Christie & Co, Germany’s hotel investment market saw a 42 % pickup in transactions in 2024, while prime yields stabilised around 5.25 %. The broader European hotel market expanded even faster (62 %), but investors are regaining confidence in Germany as pricing expectations between sellers and buyers converge.
H2 – Tourism recovery and demand
Demand fundamentals are strong. The German tourism industry recorded 433 million overnight stays from January to October 2024, surpassing the 2019 record. The number of guests in October 2024 was 2.31 % higher than in October 2023. This resilience reflects a broad-based recovery in both domestic and international travel. The continued tourism upswing is expected to support room‑night demand and occupancy into 2025.
H2 – Key trends shaping the market
Pricing and investment yields: After a difficult 2023, pricing has begun to stabilise. Christie & Co note that a prime yield of 5.25 % has given buyers and sellers more certainty.
ESG and sustainability: Environmental, social and governance (ESG) standards are increasingly important for hotel investors. The Business Outlook report notes that institutional investors and lenders now expect properties to carry sustainability certifications.
Conversions and mixed‑use developments: New hotel developments remain rare, but there is a growing trend of converting office buildings into hotels or mixed‑use schemes. This may create opportunities in secondary cities.
Digitalisation: As costs rise and labour shortages persist, hotel operators are expected to adopt digital tools and automation.
H2 – Market sentiment and 2025 predictions
Surveyed hotel owners are cautiously optimistic. Key predictions for 2025 include:
Interest‑rate relief: With inflation in Germany expected to fall below 2 %, Christie & Co anticipate further interest‑rate cuts, which would stimulate hotel transactions.
Converging price expectations: A closer alignment between buyers and sellers should support more deals.
Occupancy‑driven growth: After robust average daily rate (ADR) growth in 2021–24, hotel performance will depend more on improved occupancy.
Economic backdrop: Germany’s GDP is forecast to grow around 1.0 % in 2025, aided by real wage gains.
H2 – Case studies illustrating investment momentum
The Business Outlook report includes several recent transactions that highlight where investors see potential:
Munich: Acting for Spanish chain NH, advisers arranged the sale of the 162‑room NH Munich City Süd to a German/UK private‑equity fund, which plans to convert the hotel into student housing. This shows that Munich remains attractive for alternative‑use strategies.
Pfaffenhofen (outskirts of Munich): The Zählwerk Apartments (built in 2021) were acquired by the Coffee Fellows hotel chain; the property will undergo a soft rebranding. Accessibility to Munich makes suburban locations appealing.
Rheine: In the border city of Rheine, Christie & Co conducted an operator search for a 100‑key hotel within a 50,000 m² mixed‑use development, ultimately selecting the emerging operator Juststay. This underscores investor interest beyond the major hubs.
H2 – Why partner with Dominart Investment Group
Dominart Real Estate GmbH has over 15 years of experience and manages more than 500 properties across Germany. The firm offers end‑to‑end services from acquisition and due diligence through asset management and value creation, leveraging a network of over 10,000 addresses. Whether you are considering a hotel in a major city or a conversion project in a secondary market, Dominart provides local expertise, access to off‑market deals and support in navigating Germany’s regulatory environment.
H2 – Calls to action and internal links
Ready to explore opportunities? Contact our team for a free consultation. For more information on related topics, see our pages on real estate in Berlin, houses in Germany, new buildings and business consulting in Germany. With deep market knowledge and a broad network, we can help you acquire or sell hotel properties efficiently.
