European hotel market in strong momentum: Investments and new projects exceed last year's figures
Company Report Lodging Econometrics for Q1 2026. confirms that the European hotel sector shows no signs of faltering. With a total of 1,731 active projects comprising more than 255,000 rooms, the market is exhibiting stable growth compared to the same period last year. What is particularly striking is not just the number, but the fact that the industry has successfully adapted to new economic realities, finding room for expansion despite tighter credit conditions.
Focus on construction sites and the transformation of plans into reality
An analysis of the current phase of the projects reveals an interesting dynamic. Almost half of all planned capacity, precisely 792 projects with 119,106 rooms, are currently in the active construction phase. This is a clear indication that investors are no longer waiting for “better times”, but are actively implementing plans to meet demand, which in many European regions has already exceeded pre-pandemic levels.
In addition to what has already been initiated, the number of projects due to start in the next 12 months is also significant. This segment is recording a 61% increase in the number of rooms, suggesting a continuous influx of new capacity into the market throughout 2027.
Geographical leaders and the dominance of key metropolises
When we talk about where the most investment is made, the United Kingdom continues to hold a firm first position. London remains an absolute magnet for capital, leading the list of cities with the most new projects. Germany, despite certain internal economic challenges, takes second place, while France, Turkey and Spain topped the league of most active markets.
Cities like London, Istanbul, and Lisbon are becoming testing grounds for new hotel concepts. Investments are primarily focused on the lifestyle and luxury segments, as these categories have shown the greatest resilience to inflationary pressures and the highest capability for increasing average daily rates (ADR).
Paradigm shift through new brands
The trend that continues into 2026 is dominance large hotel groups which, through their “soft brands” and lifestyle variations, are attempting to enter the historic centres of European cities. This is crucial for DMCs and event organisers (MICE), as new facilities bring more technologically advanced spaces and more flexible concepts that more easily adapt to specific client requirements.
This wave of new openings is also encouraging existing hoteliers to modernise. The sheer number of rooms being planned and built is pushing the market to a higher level of quality, which is ultimately the best news for travellers, but also for the stability of the entire European travel ecosystem.
