European hotel industry still sees more stress than distress

More investors will be compelled to move on from hotel assets because "patience is waning" from lenders

Jun 5, 2023

A strong operating environment is keeping most hotels across Europe out of what investors would traditionally define as distress, but financing and capital structure issues are putting enough stress on them to spur deals.

Key takeaways

  • Hotels in segments that continue to outperform, particularly luxury hotels, are less likely to hit the market;
  • The mid-market segment is facing the squeeze, trading down into the budget sector;
  • Because so many properties are family-owned across Europe, situations where owners are facing more personal issues are a potential source for nontraditional distress.

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