European hospitality industry faces looming 'chain-ification'

Small, family-owned hotels still abound in the European hospitality market, but recent investment data suggests that the status quo is unlikely to continue

Based on research conducted in 2023 by Booking.com and Statista, with reference to CoStar's hospitality data, it was found that approximately 77% of hotels in Europe are independently owned and operated. In terms of investment, approximately two-thirds of transactions in the European hotel industry involve a branded hotel.

Key takeaways

• A significant portion of investment in the European hospitality sector comes from large hotel chains, which to some extent pose a competitive challenge to independent and family-owned hotels;
• The foreseeable development includes market consolidation, which could potentially marginalize smaller players within the industry. In particular, smaller, primarily family-owned establishments in segments such as inns, bed and breakfasts, and guesthouses are increasingly exiting the market;
• This trend is expected to result in hotels with higher average room rates, according to Tobias Warnecke, managing director of the German Hotel Association (IHA).

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