The 5 Most Dangerous Risks When Buying a Hotel in Germany, Austria or Switzerland — and How to Avoid Them

By Sergey Vakhnenko

The DACH hotel market (Germany, Austria, Switzerland) remains attractive — but only for investors who know how to read it correctly.

After years of advising on dozens of hotel transactions, one thing has become clear:
The most expensive mistakes don’t happen at the closing table — they happen long before, during due diligence and asset selection.

Here are the five risks I see most often — and how investors can avoid them.

1. Wrong Location Analysis: A “good hotel” in the wrong place is not a good hotel

Many buyers fall in love with the building, not the market fundamentals.

A phrase I hear too often:
“The hotel looks great — it will perform.”
No, it won’t. Not if the demand structure isn’t there.

Risk:
Weak micro-location → low occupancy → significantly lower yield.

How to avoid it:

• Analyse real demand drivers (corporate, leisure, fairs, infrastructure).

• Understand competition density.

• Study seasonal patterns (winter/off-season risks are underestimated).

• Trust market data, not the seller's narrative.

2. Overvaluation Based on Manipulated or Misleading KPIs

Hotel sales can be emotional — on both sides.
That’s why numbers are often “optimised” to look prettier than they are.

Risk:
Investor pays a premium based on unrealistic RevPAR, ADR, or GOP figures.

How to avoid it:

• Request minimum 3 years of raw operating data.

• Adjust for non-recurring income and post-Covid distortions.

• Focus on GOPPAR, not just revenue.

• Build your own financial model — or let a neutral expert do it.

3. Weak Operator or Unclear Operator Structure

The #1 reason profitable hotels turn into distressed assets: the wrong operator.

Risk:
Strong property, weak operator → low occupancy, cashflow gaps, legal exposure.

How to avoid it:

• Analyse the operator’s track record and portfolio quality.

• Review the management/lease contract line-by-line.

• Secure performance KPIs and exit/termination rights.

• Never rely on the brand name alone.

A strong hotel without a strong operator is only half an investment.

4. Missing Technical Due Diligence: The Hidden CAPEX Trap

Many hotels suffer from years of postponed maintenance — sometimes visible, often not.

Risk:
Unexpected millions in CAPEX: renovations, MEP upgrades, fire safety, energy efficiency.

How to avoid it:

• Full TDD: MEP, structural, fire safety, insulation, energy systems.

• Prepare a realistic CAPEX plan (often 10–20% of purchase price).

• Never shortcut the site inspection.

5. No Access to Off-Market Deals

The truth is simple:
The best hotels in Germany, Austria and Switzerland never appear online.

The biggest risk is not buying a bad hotel.
The biggest risk is never getting access to the good ones.

How to avoid it:

• Work with advisors who specialise in off-market hotel assets.

• Tap into networks of owners, family businesses and private investors.

• Show interest early — before an asset becomes public.

Conclusion: Hotels Are Profitable — If You Know the Traps

The DACH hotel market remains one of Europe’s strongest asset classes.
But only for investors who perform structured due diligence, apply strict criteria, and stay immune to marketing stories.

Investors who understand these risks make solid, future-proof deals.
Those who ignore them end up buying a problem — not a hotel.