The European hospitality sector has become far more competitive. Large discounts are a thing of the past, and the best opportunities often lie outside advisor-led processes. Real value is found in smaller, off-market transactions, often family-owned assets requiring significant capex and repositioning. In the US and northern Europe, few hotels remain in the hands of their original builders. Ownership has shifted to long-term core capital such as insurance funds and REITs. In contrast, southern Europe remains highly fragmented. Many hotels are still family-run, but the next generation is not always inclined to manage operational complexities. That generational transition is accelerating, and institutional investors are stepping in with the capital and expertise to reposition these assets.

Many of these properties still need the rebranding and capital investment necessary to meet institutional standards. For investors like us, this represents an opportunity to add value through professionalisation and repositioning before passing the asset to long-term institutional owners seeking stable income at core yields.

Hospitality is operationally intensive, and value-add strategies come with risk, from supply chain issues to labour shortages. Scale is therefore critical. A platform with 20 hotels can offer greater job security and career development than one with just a few. Across our portfolio, we are the fourth-largest hotel operator in Portugal, which helps us attract and retain talent. We prioritise staff training, progression, and wellbeing including providing affordable accommodation near our resorts. This focus translates directly into service quality. Scale also helps manage capex, with bulk procurement and repeat contractor partnerships improving both cost and reliability.

Read the full ‘Thought Leadership’ article at the link below