The hotel landscape in Southern Europe is experiencing exceptional growth, with three countries standing out for distinct reasons.
Italy
Luxury hotel development in Italy is expanding beyond the primary urban centers. While Rome and Milan remain key focal points, regions such as Sicily and Tuscany are increasingly drawing investor attention.
This momentum is fueled by government incentives, enhanced infrastructure, and a rising demand for authentic, localized experiences. The trend underscores the maturity of Italy’s tourism sector, where investors are diversifying their portfolios to elevate the visitor experience across the country.
Portugal
Portugal’s tourism industry continues to grow at a robust pace, bolstered by a surge in visitors from the United States, Canada, and Poland. The Algarve and Lisbon currently dominate the national hotel market.
To maintain this momentum, the Portuguese government is implementing a strategic focus on sustainability and environmental stewardship, aiming to firmly position Portugal as a leading destination for responsible travel.
Greece
Greece is rapidly emerging as a prime location for leisure hotel investments, with resorts accounting for over 50% of all rooms under development.
Despite the inherent challenges of resort investment, the country’s growing appeal to global tourists—combined with the availability of private financing—has created an environment ripe with opportunity. As a result, Greece's resort hotel sector is undergoing dynamic expansion.
What About the French and Spanish Markets?
France’s hotel sector continues to thrive, drawing significant capital from both international chains and domestic investors.
While Paris remains a key market, investor interest is increasingly shifting toward secondary cities such as Nice, Lyon, and Marseille. These urban centers benefit from strong MICE (Meetings, Incentives, Conferences, and Exhibitions) markets and enhanced transportation networks. Their relatively lower costs, compared to Paris, further incentivize investment.
Spain’s hotel investment market is currently experiencing a surge in activity. In 2024, the country recorded a substantial rise in total investment, reinforcing its status as a pivotal player in European hospitality development.
Although Madrid remains a central hub for new projects, secondary regions such as Andalusia, Valencia, and Murcia are witnessing proportionately higher growth relative to their existing hotel room supply.
In contrast, Barcelona has seen a marked slowdown in development due to moratoriums on new hotel projects.
Investor demand continues to be strong in the Upper Midscale and Upscale segments, which account for a significant share of new developments.
In summary, Southern Europe represents a vibrant and evolving market for hospitality investment, offering diverse and substantial opportunities for growth across the region.
Jacques Emmanuel Falempin