The UK achieved the highest volume of hotel transactions in Europe last year, accounting for 36% of all hotels sold, according to new data from CBRE Hotels.
Deals such as the sales of the LRG portfolio of Holiday Inn hotels to Kew Green helped the value of properties which changed hand in the UK to reach €6.1b (£4.5b), up 22% on the previous year and compared to €16.8bn (£12.4b) across the whole of Europe.
Germany, which achieved €3b (£2.2b) worth of transactions, and France, with €1.3b (nearly £1b) were the second and third busiest markets respectively.
However, investment activity in in France declined in 2014 compared to the previous year, largely due to a strong level of business in 2013 and a decline in revenue per available room (revpar) - particularly in Paris - due to austerity measures.
Scandinavia, Germany and Southern Europe produced the continent's strongest growth with volumes increasing by 89%, 74% and 50% respectively year-on-year.
Joe Stather, information and intelligence manager, CBRE Hotels, said the hotel investment market is currently benefitting from low interest rates and cyclical upturns.
"Hotel are currently presenting yield premiums significantly above traditional real estate segments such as office and retail, even across prime locations. More investors are becoming aware of the opportunity for strong returns in the sector and increasing transparency is aiding confidence.
As a result we are expecting to see heightened investor appetite to deploy capital into the hotel arena throughout 2015."