That is according to JLL's Hotel Investment Outlook 2019, which predicts that, despite political uncertainty, tourism and business fundamentals remain solid thanks to strong infrastructure developments in the region, which will continue to attract international investors towards strong assets and opportunities in these markets.
Germany and the UK account for nearly 60% of pipeline rooms currently under construction and are expected to absorb additional supply in the medium term due to strong tourism growth forecasts.
The report predicts that the European hotel market will be driven mostly by single asset deals, with portfolio trades expected to reduce, given the significant volumes of transaction of this type seen over the past two years. Overall investment volumes across Europe, the Middle East and Africa are expected to soften to $21.2b (£16.3b) from $22.9b £17.6b) in 2018.
It also predicts the sector will see new investors emerging, with diverse sources of core and core-plus capital are increasingly considering investment in the hotel market, and an increase in hotels entering the flexible workspace market transforming hotel lobbies into communal workspaces.
Philip Ward, EMEA CEO, JLL Hotels & Hospitality Group, said: "Political uncertainty and the volatility in equity markets will test investors' sentiment throughout the year. However, we expect hotel investment volumes to hold steady on 2018 levels owing to hotels' attractive yield profile compared to other sectors."Get The Caterer every week on your smartphone, tablet, or even in good old-fashioned hard copy (or all three!).