- Transaction volume of €221 million in the first quarter of 2026 – around 44 per cent lower than in the same quarter of the previous year
- The top seven markets account for over 60 per cent of the nationwide investment volume, with Munich alone accounting for around 40 per cent
- Prime yields remain stable at 5.50 per cent
The German hotel investment market has made a subdued start to 2026. In the first quarter, transaction volume reached €221 million, around 44 per cent below the previous year’s level (Q1 2025: €395 million). Compared with the five-year average for the respective first quarters (around €319 million), this represents a decline of 31 per cent; compared with the ten-year average (around €576 million), the decline is as much as 62 per cent.
The quarterly result was largely influenced by a small number of large-volume deals. The largest single transaction – the sale of the Excelsior Hotel in Munich by the Geisel family to BlackRock Real Estate – accounted for over a quarter of the total transaction volume on its own.
“Following the significant interim peak in spring and autumn 2025, a downward trend had already begun to emerge by the end of the year,” explains Christine Mayer, Head of Hotel Valuation Germany & Austria at Cushman & Wakefield. “However, we do not see a decline in investor interest, but rather a phase of greater selectivity. Capital remains available, but is being deployed in a more targeted manner – with clear requirements regarding quality, operator strength and long-term viability.”
Selectivity rather than caution
The subdued start to the year is less a reflection of a decline in demand than the result of continuing divergent price expectations and cautious deal structuring. Core assets in established locations remain highly liquid, however.
“We are currently observing greater differentiation within the market,” Mayer continued. “Investors are focusing on resilient business models, transparent operator structures and properties with clear repositioning prospects. The current market phase favours manage-to-core and value-add strategies.”
Focus on top markets – Munich the clear winner
With a share of around 60 per cent, the top seven markets accounted for well over half of the transaction volume in the first quarter. Munich in particular dominated the statistical analysis – bolstered by the quarter’s largest single deal – with a volume of around €90 million, followed by Hamburg. This means that around 40 per cent of the nationwide transaction volume was accounted for by the Bavarian capital.
Market consolidation opens up opportunities
Individual cases such as the insolvency of hotel operator REVO are not interpreted by the market as a systemic signal. Rather, they reinforce the trend towards a more nuanced risk assessment.
“Such exceptional situations do not reflect a weakness in the hotel market as a whole, but are part of a market correction,” explains Mayer. “This opens up additional opportunities for well-capitalised and experienced investors – particularly in the context of restructuring, changes of operator and strategic repositioning.”
Prime yields stable
Prime yields for hotel investments have remained unchanged compared to the previous quarter and – stable since the end of 2023 – continue to stand at 5.50 per cent. Despite increased return requirements on equity, the German hotel market thus remains attractively positioned by European standards.
Christine Mayer concludes: “The hotel investment market in 2026 is characterised by strategic selection. Investor interest remains high, but transactions require more time and realistic price levels. As buyer and seller expectations continue to converge, market activity is expected to pick up over the remainder of the year.”
