New Hotel Constructions Outpace Renovations in Europe

Europe’s hotel sector is experiencing significant growth, riding the travel industry rebound wave. Unsurprisingly, new construction projects lead the charge over conversions and renovations. According to Lodging Econometrics, by the end of the first quarter of 2024, over 250,000 rooms were under construction in Europe, a substantial number compared to the 74,000 rooms undergoing conversion or renovation.

While building new hotels tends to be more expensive, the long-term benefits of designing properties to modern standards make it a more attractive option for many investors. Newly constructed hotels often incorporate the latest sustainability features, which help reduce operational costs and appeal to environmentally conscious travelers.

Despite the importance of conversions and renovations, particularly in historic or rural regions, the bulk of capital investment is being channeled into new construction. In 2023, Europe saw €16.9 billion worth of hotel transactions, representing 787 properties and nearly 106,000 rooms. This marked a strong recovery in the market, and the upward trend continued in early 2024, when €10.6 billion in deals were completed—an impressive 123% year-on-year increase. These figures underscore the growing confidence in the hospitality sector’s future, with new builds playing a central role.

This is an excerpt from the book, The Titans of Travel: How small businesses shape Europe's accommodation industry in 50 charts, the eBook is available to download for free.