Investor confidence in European hotels is projected to remain strong in 2026 as investors eye AI’s potential to drive down operating costs, according to research from Cushman & Wakefield (C&W).
Around 58% of investors surveyed by C&W said they planned to deploy more capital in the sector this year than in 2025. A total of 54% of investors intend to be net buyers of hotels in 2026, while only 7% expect to be net sellers, up from 5% last year.
A total of 81% of investor respondents said AI will significantly shape the sector by 2030, with 86% expecting a positive impact on limited-service hotels, closely followed by full-service properties (85%).
When asked where AI will have the most impact, 80% of respondents said they expect AI to reduce operational costs through efficiency gains, and 65% were optimistic about the impact AI will have on their distribution costs via more direct bookings.
Jon Hubbard, head of hospitality, EMEA, at Cushman & Wakefield, said: “European hotel investment is entering 2026 with renewed confidence and clear priorities: to deploy more capital but with greater selectivity.
“At the same time, equity return requirements have moved higher, with an average target of 15.6%, up from 13.6% in 2025, likely reflecting increased underwriting uncertainty, not withstanding compressed lending rates.”
He added: “What’s striking is how quickly AI is moving from a longer-term theme to an investable value driver. There is an expectation that AI will help reduce operating costs through efficiency gains, and many also see scope to lower distribution costs by accelerating the shift towards direct bookings.”
Southern Europe remains a top target for hotel investors in 2026. Healthy performance, balanced visitor mix, strong growth potential and high liquidity are set to place Italy, the Iberian Peninsula and France as Europe’s most in-demand hotel investment destinations this year, with 78% of investors expressing high or very high interest in both Italy and the Iberian Peninsula, and 60% in France.
The UK and Ireland will also fare well, with a greater share of investors reporting very high interest compared to last year.
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