Autumn is traditionally a time for hotel owners to take stock, particularly in seasonal and leisure destinations. The busiest trading period is drawing to a close, the season’s results are becoming clearer and owners can begin to consider the future of their property more precisely.

Some are considering further investment. Others are reflecting on a transfer, a partnership or a sale. At the same time, prospective buyers are already preparing for the following season.

Capital is available. Operating projects are also plentiful. Yet bringing supply and demand together remains difficult.

The reason lies largely in the coexistence of two views of a hotel that do not always coincide: the long-term, asset-based perspective of the private owner and the return-driven approach of the financial investor.

An active but increasingly selective market

The figures do not describe a hotel market at a standstill.

In 2025, European hotel transactions reached €22.6 billion, representing a 30% year-on-year increase. Single-asset sales reached a record €15.6 billion. According to HVS, France ranked as Europe’s second-largest market, with approximately €3.5 billion of transactions.

The first half of 2026 brought a slowdown. European investment totalled €9.4 billion, down 10% year on year. Nevertheless, this remained 11% above the ten-year first-half average, with France accounting for 14% of European transaction volume.

The market therefore remains liquid at an overall level, but this liquidity is unevenly distributed. Capital is concentrating on the most legible assets: established locations, sound real estate, differentiated positioning, credible repositioning potential and the ability to generate predictable results.

JLL’s assessment of the 2026 market is revealing: the period of uniform recovery is over. The market has entered a phase of strategic sorting in which properties with a strong identity and identifiable value-creation opportunities will be favoured.

This reflects what we are seeing in transactions. There is considerable interest, but far fewer projects capable of satisfying the seller’s expectations, financing constraints and the buyer’s objectives at the same time.

Operators are increasingly turning to external capital

A growing number of hotel operators want to accelerate their development without committing all the required capital themselves.

Some therefore choose to formalise a hotel search mandate to identify a property that corresponds precisely to their operating strategy and financing structure.

They are also partnering with family offices, investment funds and club deals to acquire boutique hotels with 30, 40 or 50 rooms. For the operator, this model can provide access to larger properties, support a new stage of development and spread the financial risk.

This approach is sometimes described as “asset-light”. However, the term should be used with care.

In its traditional sense, an asset-light model is one in which a hotel group expands through franchise or management agreements without directly owning the hotel real estate. Accor, for example, states that 97% of its current network operates under franchise or management agreements.

When an operator joins forces with investors to acquire both the freehold and operating business, the asset is still owned by the investment structure. The arrangement mainly reduces the amount of equity that the operator must contribute. It may therefore be more accurate to describe it as a capital-light expansion strategy or an acquisition backed by external capital.

This distinction matters because it helps clarify where the risk actually lies and what each partner expects from the transaction.

The required return is not simply an operating yield

The returns sought by some investors may appear high when compared with the underlying economics of an independent hotel.

Yet these figures are not imaginary. A Cushman & Wakefield survey reported an average required return on equity of 13.6% among hotel investors for 2025. In Paris, a club deal involving two boutique hotels with a combined 89 rooms recently announced a target net IRR of 10% over five years, although this return is not guaranteed.

Targets of between 10% and 15% therefore exist. But they do not necessarily correspond to the annual return generated immediately by the hotel’s operations.

An IRR at this level may combine several components:

• distributions paid during the holding period;

• improvements in revenue and operating profitability;

• the progressive repayment of debt;

• value created through refurbishment or repositioning;

• and, above all, the expected capital gain on exit.

The difficulty arises when this return objective is applied to a hotel that is already operating efficiently, acquired at its long-term property value and offering no realistic opportunity to increase rates, occupancy or capacity significantly.

In such a case, the business plan can only achieve the required return through very ambitious assumptions or a reduction in the acquisition price. This is generally where negotiations begin to stall.

A hotel is not simply an EBITDA multiple

For a private owner, the value of a hotel is not limited to its operating profit.

It also reflects the quality and scarcity of the location, the underlying land value, existing permissions, the replacement cost of the building, investments already completed and, in some cases, several decades of long-term wealth creation.

A hotel is simultaneously a business, a property asset and a transferable legacy.

This dual dimension is particularly important in the sale of a freehold hotel and its operating business, as the value of the real estate and the performance of the business must be considered together.

A financial investor takes a different approach. The analysis focuses on available cash flow, future capital expenditure, debt capacity, return on equity and the projected exit value after five or seven years.

Neither approach is illegitimate. But they do not naturally speak the same language.

An owner may believe that the hotel is worth more than its current operating performance can finance. Conversely, an investor may recognise the quality of the underlying property while concluding that it cannot generate the return required by the providers of capital.

The issue therefore does not always lie in the intrinsic value of the asset. It lies in the compatibility between that value, the operating model and the buyer’s investment horizon.

Smaller boutique hotels do not fit standard formulas easily

This tension is particularly visible in properties with 30 or 40 rooms.

Their size limits potential economies of scale. Management, reception, kitchen and technical teams represent proportionally higher costs than they would in a hotel with 100 or 150 rooms.

In seasonal destinations, the hotel may need to generate most of its annual performance within a few months. Refurbishment, regulatory compliance, furniture replacement, distribution costs and online travel agency commissions must also be taken into account.

An investor cannot therefore apply the ratios of a standardised, year-round city hotel mechanically to a seasonal boutique property.

Conversely, a small room count is not necessarily a disadvantage. A well-located hotel with a distinctive identity and the ability to sustain a strong average room rate can create considerable value. But this value creation depends on a detailed understanding of the operation and its local market. It cannot be reduced to a financial formula reproduced from one acquisition to another.

The return of owner-operators is a significant signal

The transactions completed in 2025 provide an interesting perspective. According to HVS, private equity activity fell by 39%, while owner-operators and real estate investment companies became the most active participants in the European market.

Owner-operators were also the largest net buyers of single hotel assets.

This does not mean that investment funds are withdrawing from hospitality. On the contrary, JLL expects private equity capital to remain active in repositioning projects, portfolio transactions and high-quality properties.

However, not every hotel fits these strategies. Mid-sized assets that depend heavily on the operator or have a significant long-term property component may be better suited to hotel entrepreneurs, private investors or family offices with longer holding periods.

Unlocking transactions requires the right type of capital

The objective is not to choose between a long-term asset strategy and a financial strategy. It is to bring the two together.

This first requires each hotel to be presented within the appropriate framework. Proper preparation makes it easier to understand what works and what holds back a boutique hotel sale before the property is introduced to prospective buyers.

A seasonal boutique hotel should not be assessed as if it were a standardised urban property. A long-term real estate asset should not be marketed solely on the basis of an earnings multiple. Conversely, the quality of the property cannot overshadow the operation’s actual capacity to finance the acquisition.

The next step is to identify the right buyer profile:

• an owner-operator seeking a long-term project;

• a family office attracted by the underlying property value;

• a club deal with a suitable holding period;

• an investor specialising in repositioning;

• or an operator wishing to run the hotel without necessarily owning all of the real estate.

Certain transaction structures can also help narrow the gap: separating the property from the operating business, retaining the seller as a minority shareholder, vendor financing, an earn-out mechanism, or a partnership combining real estate capital with hotel operating expertise.

These solutions are not substitutes for a realistic valuation. However, they can prevent a quality property from being dismissed simply because it does not fit the financial model originally envisaged.

Autumn 2026: a time to prepare, not improvise

The end of the season may bring new sale intentions to the market. But a serious hotel transaction cannot be prepared in a matter of weeks.

The accounts must be adjusted, future capital expenditure identified, the legal and property position clarified, and operating performance placed within its local context. It is also necessary to determine whether the hotel’s value derives primarily from its operation, its real estate or a combination of the two.

For buyers, preparing for the next season means having a clearly defined project, identified equity and a credible operating strategy.

The hotel market is not short of capital. What it sometimes lacks is a common language between those who have built a long-term asset, those who want to operate it and those responsible for generating returns for investors.

This is likely to shape part of the market over the coming months. The challenge is not to pursue the highest theoretical return, but to match each hotel with the capital, operator and holding period that genuinely suit it.

Xavier Albérini
Founder of Carlton Hotelbrokers