Hotel values across Europe grew by 3.9% in 2017 following a stagnant year in 2016, according to the 2018 European Hotel Valuation Index (HVI) published by global hotel consultancy HVS.
The HVI monitors annual changes in the value of four- and five-star hotels across 33 European cities.
Report co-author Sophie Perret, a director of HVS in London, said: "Business and consumer confidence, as well as GDP growth in Europe, are all riding high. Hotel demand is strong in the majority of European markets, with low levels of new supply in most cities pointing to robust performances across the board."
Paris, London, Zurich, Geneva and Rome continue to top the table of in terms of value per room, while Lisbon recorded the strongest growth seen in 2017, up 14.7% on 2016.
A weak pound presented challenges for UK hotels with hotels in all cities seeing a small decline in their value in euros.
Birmingham and Manchester hotels saw a slight increase in sterling values. Likewise London's hotels grew in value by 4.3% in sterling on the back of a strong economy and the city's on-going popularity with leisure and business travellers. Hotels in Edinburgh similarly saw their value grow by 6.3%.
Report co-author Simon Hultén an analyst at HVS said: "On balance, it's likely that hotel investment will continue unabated in most cities, as strong underlying principles drive value growth, especially for those markets in Eastern and Southern Europe, which haven't yet returned to pre-crisis value levels."
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