MADRID — Europe's hotel industry market in 2025 was mostly dominated by single-asset deals, but a few notable larger mergers and acquisitions were pulled off thanks to timing, trust and partnership, according to hotel owners.
Speaking at the Atlantic Ocean Hotel Investors' Summit in Madrid, hotel company owners outlined what helped M&A deals over the finish line last year and why this year may not bode well for further activity.
One key takeaway: The well-prepared buyer is ready to move at a moment's notice. Timing cannot always be planned, but speakers advocated for doing homework and due diligence around possible deals carefully and in advance.
That was true of Pandox AB’s September acquisition of Irish hotel firm Dalata Hotel Group, said Jacob Rasin, vice president of transactions at Pandox.
He said Pandox was certain what it wanted to do with the Dalata portfolio.
“We knew the market and were able to team up with long-term partners such as Scandic,” with the plan now, he added, being to sell the operating platform to Scandic and lease back 31 assets.
The whole Dalata portfolio had 56 hotels.
Kenneth Hatton, head of hotels, Europe, at business advisory CBRE, said that with hotel deals, “everyone has a plan until they get punched in the face," a famous quote from former world heavyweight champion Mike Tyson.
Rasin said blows can be dodged by having partners you trust, trust in yourself and the know-how to manage complexities like different timelines and market regulatory platforms.
“No plan works, but planning is essential,” he said.
In February, Finnish firm CapMan Real Estate via its CapMan Hotels II fund acquired Nordic hotel platform Midstar Fastigheter AB's portfolio of 28 hotels, 4,709 rooms and two boats.
CapMan, which has approximately €10 billion of assets under management, plans to add about 200 rooms by next year.
The deal benefited from CapMan’s relationship with its principal financier Nordic Bank, said Thomas Laakso, partner, CapMan Real Estate.
“Any concern about debt was not about us, but we were constantly being asked, 'What is your capital stack?'” he said, adding CapMan secured the services of the best consultancy from the start of the process.
“We wanted the best advisors for our benefit and to block them from the opposition,” he added
Laakso said CapMan is now looking at the sale of the portfolio’s property company and putting a long-term tenant in place.
Other assets, he said, would benefit from capital expenditure.
“Many of the hotels had expiring lease agreements, and ahead of schedule we were able to extend a lot, but not every asset was a trophy, so some required CapEx. … Our base underwriting was able to identify where we could add rooms.
“Our entire portfolio has €2 billion in gross asset value, and we’re aiming for €3 billion. There is room in the [Nordic and European] market,” Laakso added.
Lauren Okada Young, managing director of real estate at Brookfield Asset Management, said after several years of monitoring hostel-hybrid brand Generator, her firm successfully got a €776 million deal over the line in 2025.
“Generator we had watched and admired for many years, a €776 million deal with a pan-European portfolio and a unique, design-led niche,” she said.
She said timing was everything for Brookfield, too.
“[Generator’s] seller launched the process in 2023 … We started underwriting at the end of 2024 and closed in mid-2025,” she said.
She added the niche is economically viable, with its beds-per-room model competing on a revenue per available basis with upscale hotels.
Bruno Juin, European hospitality investment director at Atland Voisin, said his firm in 2025 acquired a portfolio of 41 Ennismore-managed hotels via its asset management division Keys Real Estate Investment Management.
He said that the portfolio was France-heavy but that the objective is to be more pan-European.
“The deal allowed us to own in markets that we did not know — Germany, Italy and Spain,” he said.
The panelists said they spend more and more time considering supply and demand and how it changes and has changed.
“What is unique about Generator is that 60% of its inventory is shared rooms, so we have the ability to play across different pricing segments,” Okada Young said.
She added the brand had some, for want of a better phrase, “normal hotel pricing, some bifurcation.”
“The asset lends itself well to a diverse demand base, and we liked how fragmented the space is. There are a few dominant players, and then the rest is thinly spread.
“We know the cost of our capital, and we bought [Generator] with our opportunity funds," she said.
Global economic and market challenges
Current geopolitics might limit the partnership pool for mergers and acquisitions activity in 2026, panelists said.
Political clamor appears to be noisier now than it ever has been, despite other attendees and panelists suggesting even the loudest noises nowadays seem to be quickly forgotten.
The future of Greenland is one issue dominating geopolitics today.
Two panelists, Laakso and Rasin, live and work in the Nordics.
“Greenland could be a game-changer,” Rasin said.
The advent of widespread tariffs on imports to the United States was another incident that alarmed the world, and still does. Pandox managed to negotiate around it, he said.
“'Liberation Day' was somewhat in the middle of the [Dalata acquisition] process,” Rasin said.
Hotel-industry competition is also getting more fraught.
As competition rises, real estate affordability and hotel accessibility move further up the agenda, said Brookfield’s Okada Young.
CapMan’s Laakso said Nordic initiatives around sustainability are levers in negotiations and have made companies such as his more attractive to lenders.
As global warming continues, the Nordics also are becoming more attractive to summer guests, he said.