The UK accounted for nearly one quarter of all European hotel transactions achieved in 2019.
A total of €27.1b (£23.5b) worth of deals were done across the continent, the highest annual level ever recorded, according to the annual Hotel Transaction report published by hotel consultancy HVS and its brokerage and investment services division HVS Hodges Ward Elliott.
Some €5.3b (£4.4b) - 23% of total volumes – took place in the UK, a figure which was 15% down on the previous year.
Germany recorded 18% of all deals as the second busiest country for transactions with just over €4b (£3.5b) of investments, up 6% on 2018 levels.
Shaffer Patrick, analyst at HVS Hodges Ward Elliott, and co-author of the report, said: "Record low interest rates amongst various European countries and continuing yield compression in key markets have helped to drive large investment volumes compared to previous years.
"Asian investors have deployed 84% more capital in 2019 than in 2018, with a dominating presence from Chinese, Singaporean and South Korean investment firms and sovereign wealth funds. These factors, combined with the comparative affordability due to a weakening of the euro and sterling on account of Brexit have made Europe an even more sought-after hotel investment marke."
A total of 844 hotels and some 132,000 rooms changed hands, with 318 hotels sold as single asset transactions and 526 hotels as part of portfolio deals. Average price per room for single asset transactions grew by 4% to €218,000 (£188,900).
The year's biggest deals included the sale of the four-strong Grange Hotels portfolio in London to Queensgate Investments for €1.2b (£1b) and the UK-based, 17-hotel Marathon portfolio to DTGO Corporation for €535m (£450m).
Looking ahead to transaction activity in 2020, the report said that it is unlikely the same level of investments will be achieved as in 2019. "New supply and the UK's divorce from the European Union will influence transaction volume this year," said report co-author Nicolas Auer, associate, HVS Hodges Ward Elliott.
"Other factors such as staffing pressures, inflation risks, trade wars, coronavirus-related travel bans or cancellations and concerns that a global economic slowdown might also trigger hesitation in some investors' minds."