German hotel investment volume fell to roughly €600 million in the first half of 2026, down from about €1.1 billion in the same period of 2025 — a drop of nearly half — while operating metrics held steady, with RevPAR flat at €74 and prime yields stable at around 6.5%, according to Cushman & Wakefield's Market Beat Germany report.

The 45% decline in transaction volume signals a capital markets pullback rather than an operational one. Hotels themselves are performing: occupancy rose slightly to 65%, up 1 percentage point year-on-year, and August delivered RevPAR growth of 4.7%, pointing to a stronger second half.

Who is still buying German hotels?

International investors accounted for more than half of transaction volume in H1 2026. The buyer pool was led by high-net-worth individuals and family offices, followed by institutional investors and hotel operators themselves.

The defining event of the half-year was not a single trade but the break-up of the insolvent REVO Hospitality Group. The dismantling of the failed portfolio gave several international hotel groups their first entry into the German market — or their first significant expansion in it — as assets dispersed to new owners.

Why have prime yields held at 6.5%?

Prime yields for hotels operated under hotel management agreement (HMA) have remained largely unchanged at around 6.5% since the end of 2023. The stability at the top of the market masks widening dispersion beneath it.

Outside the core segment, yields increasingly differentiate by location, asset quality and risk profile. Prime assets continue to attract strong investor demand. Secondary locations, by contrast, must demonstrate to lenders and buyers that operational value creation and CAPEX planning can sustainably support returns.

How is shrinking supply supporting performance?

Data from the German Federal Statistical Office shows hotel supply recorded a slight decline in the period, with hotel closures surpassing additional capacity coming online. That contraction keeps competitive pressure contained.

The supply discipline helps explain the operating resilience. Average daily rate slipped 1.6% year-on-year to €113, but the occupancy gain absorbed the rate softness, leaving RevPAR essentially unchanged at €74, up 0.1%.

The metric mix matters for operators: rate-driven RevPAR growth tends to drop through to margins more directly than occupancy growth, which carries variable labor and cost-of-goods drag. Germany's flat RevPAR at higher occupancy implies operators absorbed modest rate discounting while carrying heavier variable costs per available room.

What comes next?

Cushman & Wakefield expects market conditions to strengthen further in 2027. The return of several major biennial and triennial trade fairs should lift corporate travel demand and pricing power across Germany's key hotel markets, giving owners leverage to rebuild ADR from its current €113 base after a half-year of rate erosion.

For investors, the question is whether the €600 million first half marks the trough of the current cycle. The REVO break-up demonstrated that distressed German hotel assets are finding international buyers, and the stable prime yield of 6.5% suggests core product is still being priced on fundamentals rather than distress.

The second half of 2026 begins with momentum from August's 4.7% RevPAR growth, and the trade-fair calendar of 2027 gives owners and operators a concrete demand catalyst to underwrite against.

About the data source: Cushman & Wakefield (NYSE: CWK) is a global commercial real estate services firm with approximately 53,000 employees in over 350 offices across nearly 60 countries. The firm reported revenue of $10.3 billion in 2025.