Saturday, May 17, 2025
Europe is leading a powerful resurgence in global hospitality construction, driven by an ambitious pipeline of 1,683 new hotel projects and over 247,000 rooms under development in early 2025. The surge is fueled by major contributions from the United Kingdom, Germany, and Turkey, which together account for a significant share of new builds and room capacity across the continent. With nearly half of the projects already under construction and strong growth in upscale, luxury, and renovation segments, these countries are spearheading a bold transformation in Europe’s hotel landscape—positioning the region at the forefront of global tourism infrastructure expansion.
The European hospitality industry has entered 2025 with remarkable construction momentum, positioning the region as a global leader in hotel development. According to the latest data from Lodging Econometrics (LE), Europe’s hotel pipeline has expanded rapidly in the first quarter of 2025, with 1,683 new hotel projects totaling 247,472 rooms under various stages of development. This surge reflects Europe’s strategic push to meet evolving travel demands, increase luxury accommodation capacity, and renovate aging hotel infrastructure across key markets.
Strong Momentum Across All Development Phases
The comprehensive European hotel pipeline comprises three primary development stages: under construction, expected to start within 12 months, and early planning. Nearly half of the total pipeline is already under construction, highlighting a significant commitment to active execution. Currently, 766 hotel developments totaling 115,227 rooms are actively under construction across Europe, showcasing the region’s strong momentum and advancing pipeline toward near-term completion.
Additionally, 386 projects with 57,992 rooms are slated to commence construction within the next 12 months, reinforcing short-term growth expectations. Meanwhile, 531 projects representing 74,253 rooms are in the early planning stage, pointing to sustained momentum in the mid-to-long term. These figures collectively reflect Europe’s comprehensive and balanced investment across all phases of hotel development.
Surge in New Project Starts and Announcements
Q1 2025 witnessed a sharp increase in new hotel construction starts. During this period, 90 new hotel projects totaling 11,184 rooms broke ground—a year-on-year rise of 14%. Moreover, 94 additional projects comprising 13,576 rooms were newly announced, signaling strong investor and brand confidence in Europe’s long-term tourism prospects.
This uptick in both construction starts and project announcements demonstrates that Europe’s hospitality sector is not only rebounding from previous slowdowns but accelerating beyond historical growth levels. Developers and operators appear to be capitalizing on post-pandemic travel recovery, heightened luxury travel demand, and urban revitalization efforts to expand footprint across strategic locations.
Explosive Growth in Renovations and Conversions
Alongside new developments, Europe’s hospitality industry is also witnessing a substantial rise in renovation and brand conversion activities. As of March 2025, there are 718 such projects accounting for 93,305 rooms, marking a significant increase of 32% in the number of projects and 26% in the number of rooms compared to the corresponding timeframe in the previous year.
This growth in renovation and conversion initiatives illustrates a dual-pronged strategy among developers—balancing new constructions with modernization of existing infrastructure to meet rising traveler expectations and sustainability standards. Older properties are increasingly being rebranded or retrofitted, particularly in mature urban centers where new construction opportunities are limited by space or zoning restrictions.
Upscale and Luxury Segments Drive Expansion
The latest report also highlights the ongoing dominance of upscale and upper midscale segments within Europe’s hotel development landscape. Combined, the upscale and upper midscale segments account for 683 hotel developments and 103,035 rooms, making up 41% of all active projects and 42% of the planned room inventory within Europe’s hospitality pipeline. These mid-to-upper tier offerings are particularly attractive for developers seeking to capture the broadest traveler demographic—from business travelers to affluent leisure tourists.
In addition to strong mid-market performance, the luxury and upper-upscale categories are reaching record levels. The luxury segment has reached an all-time peak, with 132 high-end hotel projects totaling 17,124 rooms currently in the development pipeline across Europe. Meanwhile, the upper-upscale segment has surged to 281 projects comprising 45,091 rooms. This reflects a regional trend toward premium travel experiences, personalized service, and high-end amenities increasingly favored by post-pandemic travelers.
Country-Level Leaders in Hotel Development
At the national level, five countries stand out as major contributors to Europe’s hospitality boom. The United Kingdom leads with a commanding 288 projects and 41,338 rooms in the pipeline. The country’s leadership position reflects its continued role as a global tourism hub, with London, Edinburgh, and other regional cities drawing steady investment in both new hotels and conversions.
Germany ranks second with 153 projects and 25,971 rooms. The country’s strategic importance as both a business and leisure destination supports its ongoing hotel construction activity. Developments are concentrated in key urban centers, regional capitals, and trade fair cities.
Turkey has emerged as a particularly dynamic market in 2025, securing the third spot with a record-breaking 133 projects comprising 19,350 rooms. This growth comes amid the country’s broader tourism diversification strategy, aimed at reducing seasonal fluctuations and attracting higher-spending international travelers.
France, another perennial tourism powerhouse, ranks fourth with 119 projects and 12,078 rooms. The country’s ongoing efforts to upgrade hospitality offerings in major cities and secondary destinations are reflected in its strong pipeline. Portugal follows closely in fifth place with 115 projects and 14,199 rooms, driven by rising tourist arrivals and government initiatives to promote tourism in emerging regions beyond Lisbon and Porto.
Together, these five nations account for 48% of all hotel projects and 46% of total rooms in the European pipeline—underscoring their strategic roles in shaping the continent’s hospitality landscape.
City-Level Activity Highlights Market Hotspots
On the city level, London remains the undisputed leader, with 81 projects totaling 15,459 rooms under development. The city continues to attract international investment due to its global business appeal, cultural attractions, and infrastructure connectivity. London’s robust pipeline covers a wide range of segments, from luxury to economy, catering to diverse traveler profiles.
Istanbul ranks second among European cities, with 49 projects and 7,743 rooms, fueled by Turkey’s nationwide tourism strategy and the city’s status as a historic and commercial center. Lisbon has emerged as a prominent growth hub in Europe’s hotel sector, ranking third with 36 active developments totaling 4,230 rooms in the pipeline. The Portuguese capital continues to grow as a digital nomad, tech startup, and leisure tourism hub.
Dublin also sees healthy development with 26 projects and 4,696 rooms, reflecting Ireland’s appeal as a business gateway to Europe. Tashkent has unexpectedly risen as a key development hub, with 25 hotel projects and 4,261 rooms in progress, signaling Central Asia’s accelerating push to strengthen its tourism infrastructure and regional travel appeal.
Other cities with noteworthy growth include Edinburgh, which recorded 18 projects and 3,028 rooms—a record high for the city in terms of room volume. Madrid, while smaller in room count, achieved a record number of projects at 17, confirming its role in Spain’s hotel investment landscape.
Hotel Openings and Forward-Looking Forecasts
As of Q1 2025, Europe has already opened 41 new hotels comprising 5,450 rooms, reflecting the near-term fruition of projects initiated in recent years. LE projects that by year-end, an additional 314 hotel properties featuring a combined total of 42,099 rooms will launch across Europe, further accelerating the region’s hospitality expansion. This brings the total expected new openings for 2025 to 355 hotels and 47,549 rooms.
Projections for 2026 indicate continued momentum, with 371 additional hotel openings expected to deliver a combined 50,255 new rooms across Europe. This steady upward trajectory in hotel openings confirms that the pipeline’s strength is translating into real-world capacity growth—bringing new inventory to market and enabling destinations to accommodate rising visitor volumes.
Strategic Implications for Europe’s Hospitality Sector
Europe’s rapid hotel development boom in 2025 highlights underlying shifts transforming the region’s hospitality landscape. First, the region is responding to sustained demand recovery in international and regional tourism, which continues to strengthen following the disruptions of recent years. Developers are targeting locations with proven demand and high visibility to maximize return on investment.
Ongoing renovation and brand conversion efforts reflect a widespread initiative to revitalize existing hotel assets, bringing them in line with contemporary guest preferences, sustainability benchmarks, and evolving brand specifications. Renovated hotels offer faster time-to-market and allow operators to leverage established locations without the costs associated with greenfield developments.
Third, the clear shift toward luxury and upper-upscale development signals that traveler preferences are evolving toward more premium, experience-driven stays. With high-end segments now reaching record levels in terms of pipeline volume, brands are positioning themselves to capture discerning travelers seeking comfort, authenticity, and tailored service.
Finally, the prominence of markets like the UK, Germany, and Turkey shows that a combination of macroeconomic resilience, tourism policy innovation, and diversified visitor bases are vital to sustaining large-scale hospitality investments. Countries investing in infrastructure, digital tourism tools, and streamlined permitting processes are gaining a competitive edge in attracting hotel development capital.
Europe leads the global hospitality construction surge in 2025 with 1,683 hotel projects underway, as the UK, Germany, and Turkey drive growth through large-scale developments and record-breaking room capacity. Their dominance reflects strategic investments in upscale, luxury, and conversion projects across key tourism hubs.
Europe’s hospitality sector is undergoing a profound transformation in 2025, characterized by record development pipelines, strong country-level leadership, and a broad focus on upscale and luxury accommodations. With 1,683 hotel projects and over 247,000 rooms under development, the region is setting the pace for global hotel expansion. Countries such as the United Kingdom, Germany, and Turkey are leading this transformation through bold development strategies, substantial renovation efforts, and a commitment to enhancing tourism infrastructure.
As hotel openings increase and planning pipelines deepen, Europe is poised to offer travelers an unprecedented array of lodging options—from historic urban conversions to cutting-edge luxury resorts. With construction momentum showing no signs of slowing, the European hotel industry is well-positioned to meet the demands of a resurgent global tourism market in 2025 and beyond.
