We are only a few months into 2026 and the industry has already been reminded, once again, that certainty is not something hospitality gets to keep for long. The situation in the Middle East (with temporary shutdowns at major hubs in Dubai, Abu Dhabi and Doha disrupting travel across Europe, Asia and Australasia) arrived as a fresh test of confidence at exactly the moment the market was finding its stride. It is the kind of shock that, five years ago, might have caused investors to freeze. What is striking in 2026 is how little freezing there has been.
We are seeing this play out in real time through our current mandates. For example, we are advising a real estate investor entering the European hotel market for the first time, partnering an operating platform to deploy capital into the sector. It is a clear illustration of new capital not just returning, but entering with conviction.
At the same time, we are supporting several established hotel investors as they build out in-house asset management capabilities, reflecting a shift towards more active, performance-led ownership models.
This industry has been through so much now, that a certain resilience has become structural. Not complacency, but a new relationship with risk. The question is no longer whether uncertainty will arrive. It is how you price it, plan around it, and position for what comes after.
I attended IHIF Berlin 2026, and the mood in the room reflected exactly that shift. Under the theme Returns Redefined. Value Reimagined, more than 2,500 delegates and 700 investors representing $581 billion in assets under management gathered for what felt less like a recovery conference and more like a forward-planning one. The sector has clearly made a decision: it is done waiting.
The Numbers Are Hard to Argue With
According to Savills, UK hotel investment volumes exceeded £1.1 billion in Q1 2026, representing a 63% increase on the £680 million recorded in Q1 2025. London had an exceptionally strong quarter, accounting for 68% of total volumes. The headline transactions (Park Plaza Waterloo, Marriott Grosvenor Square, Radisson Blu Leicester Square, the Grafton Street development in Mayfair) are not small, speculative bets. These are significant, institutional-grade commitments to one of the world's most enduringly liquid hotel markets.
Savills notes that capital continues to flow into the sector, with liquidity improving across both equity and debt markets and pricing expectations becoming more closely aligned. A borrower-friendly and competitive debt environment provides a solid foundation for further growth in transaction volumes in 2026. What that means in plain terms is that the bid-ask gap that paralysed so many deals through 2023 and much of 2024 is narrowing. Buyers and sellers are finding each other again.
That said, no one in this industry is operating without a degree of caution. Savills is clear that risks and volatility remain, with geopolitical uncertainty slowing RevPAR growth and increased minimum wage costs still taking effect. These are real pressures, and operators are feeling them, particularly in regional markets where cost inflation has not been met with equivalent rate growth. But the investment community has clearly decided that the structural case for UK hotels is too strong to sit on the sidelines any longer.
Europe
What was striking at IHIF Berlin was the shift in language. Twelve months ago, conversations still centred on recovery, how far back, how fast, what the baseline looked like. This year, the vocabulary had moved on. The discussions were about repositioning, asset optimisation, and where the next cycle of value creation sits. The IHIF theme captured it well. This is not a market still finding its feet; it is a market actively sorting winners from laggards.
European hotel transaction volumes are recovering, interest rate pressures are easing, and institutional investors are actively seeking to deploy capital that had been sidelined for the better part of two years. New brands are moving into the region. New entrants, particularly in the third-party management space, are making their presence felt. The pipeline feels genuinely active in a way that it has not for some time.
Across Europe, the longer-term structural drivers are also compelling. Arrivals to Europe are projected to grow 5% across 2026, and a Colliers report on expanding airport capacity and tourism, published in March 2026, paints an even more striking picture of what is coming: capacity at the top ten European airports is set to increase 60% over the next 25 years, reaching nearly one billion passengers. That is not just an infrastructure story, it is a demand story, and it should anchor the long-term underwriting assumptions of every hospitality investor in the region. More passengers, more footfall, more room nights, more F&B spend. The pipeline of airport expansion from Heathrow to Istanbul to Warsaw's new Solidarity Airport signals decades of structural tailwind.
The Middle East: Uncertainty as a Constant Variable
No honest assessment of the global hospitality investment landscape in Q1 2026 can sidestep the Middle East. And our industry, to its credit, is not trying to.
The events in Iran and the ongoing instability across the Gulf have introduced new variables into a region that was, until recently, the poster child for ambitious expansion. According to data cited by Juliett Alpha and referenced in the Colliers airport report, a third of long-haul passengers that flew between Europe and Asia in 2025 travelled with three Gulf airlines — Emirates, Etihad and Qatar — a figure that rises to 57% for journeys between Europe and Australasia. When those hubs face disruption, the ripple effects reach across the entire global routing map.
The honest answer is that nobody knows yet how significant the medium-term impacts will be. What I would say, and what I heard repeatedly from investors in Berlin, is that this industry has genuinely developed a new relationship with uncertainty. COVID was once-in-a-generation. Russia-Ukraine reshaped assumptions about Eastern European growth. And yet capital kept moving. Deals kept closing. The sector adapted.
The current Middle East situation is serious, and it would be wrong to minimise it. But the conversation has shifted from "should we be in this market?" to "how do we price the risk, and what does a resilient portfolio look like in this environment?" That is a more sophisticated question, and it reflects a more sophisticated investor base. Some capital will rotate towards perceived safe havens while others will identify opportunity precisely where uncertainty is highest. Both strategies have merit depending on the mandate.
What This Means from a Talent and Leadership Perspective
At HPG Advisory Services, we sit at a particular vantage point: we see where the capital is going by watching where organisations are choosing to invest in leadership. Our work spans executive search, human capital architecture, talent management consultancy and behavioural profiling, and each of those disciplines is currently telling the same story. Demand is up, the talent pool is tighter than it looks, and the organisations moving fastest are those that treat human capital strategy with the same rigour they apply to their investment thesis.
Our executive search mandates are reflecting a clear shift in what investors and owners want at the top. There is growing demand for Asset Managers who can operate at the intersection of real estate and hospitality, people who understand both the balance sheet and the guest experience. At CEO level, boards want leaders with a demonstrable track record of navigating complexity, not just growth in benign conditions. This is where our behavioural profiling work has become increasingly valued: cultural fit and the ability to perform under uncertainty are not things you can reliably assess from a CV alone, and the cost of a mis-hire at this level is significant.
We are also seeing a meaningful uptick in mandates linked to human capital architecture, organisations building out their structures from scratch, whether that is a new brand entering the EMEA market or a platform business being assembled for the next wave of third-party management opportunities. Getting organisational design right from the outset, with succession frameworks built early, is something more sophisticated investors are now prioritising rather than retrofitting later. Our talent management consultancy work sits squarely in this space, helping clients think through leadership pipelines in parallel with their asset strategies, not as an afterthought once the deal is done.
The Overarching Signal
At the Marlene Bar at IHIF Berlin, it was notably quieter than usual. Whether that reflects caution, an earlier bedtime, or simply that everyone has learned to pace themselves at these events after too many years of conference fatigue, I really cannot say, but the conversations happening were anything but quiet.
The overarching feeling was one of a sector that has made its peace with the world it is operating in. The macro headwinds, inflation, geopolitical friction, cost pressures, and aircraft delivery backlogs are real and acknowledged. However, they are being priced in, planned around, and in some cases actively exploited as opportunities.
UK hotel investment at £1.1bn in a single quarter. European airport capacity set to grow by 60% over the next generation. New investors entering the market. New brands moving into the region. A leadership talent market tightening as organisations build for the next cycle.
For those of us advising the sector, whether on capital, strategy or the people structure required to execute both, this is an active, forward-looking moment. The industry seems upbeat, hungry to move, and increasingly impatient with waiting for perfect conditions that will never quite arrive.
