Speaking at the 2025 R&R Hospitality Forum in Athens, Greece, STR Samantha Mardkhah said that 10 years ago, Europe’s most expensive destination France had a hotel average daily rate (ADR) of €151 more than the cheapest destination on the continent, Portugal.

Now, while France remains the most expensive destination in Europe, Turkey is now the cheapest while the difference in ADR now totals €238.

Mardkhah said the increase has been driven by the increasing cost of the luxury market, adding: “From a class point of view it is really just the economy class that is bearing the brunt of consumer caution.

“The luxury segment is still doing very well and it is the one that is also pulling the rest of the classes up.”

Europe’s new luxury builds

She added the European luxury market has been boosted by new builds and cited the example of Italy, Spain and France that once combined geographically would occupy about a sixth of the US.

However, despite the considerable difference in size she added the three European countries have more hotels which have an ADR surpassing $1,000 than the US has in the entire country with 499 properties in 2024, more than double the 179 recorded in 2019.

While the growth in luxury properties has been strong, Mardkhah added the overall growth in hotel rooms in Europe has declined a little with an average of 65,000 rooms currently forecast to open annually.

While the majority of the new rooms are opening in the UK, Spain and Germany, leaving 10,000 to 20,000 per annum across the rest of Europe she said the slower rate of opening will have a positive impact on the bottom line.

Mardkhah said: “This is lower than what we’ve seen in recent years and should eventually promote an increase, a return of increase in performances, both for occupancy and for ADR.”

The 2024 hangover

She added 2025 was an interesting year for the eurozone coming after 2024 when it hosted a number of mega events including the Paris Olympics, Germany’s UEFA Euros football tournament and the Taylor Swift Eras tour which drove double-digit growth in both occupancy and average treatment rates (ATR) performance.

Despite these factors, Mardkhah said Europe continued to grow with RevPAR for the first eight months of the year at a rate of 4 per cent more than in 2024.

Drilling down into the continent, she added much of the growth has been driven by the Nordics as well as Central and Eastern Europe that were slow to recover post Covid but in 2025 saw RevPAR increases of 5 per cent to 6 per cent.

Spain also performed strongly in 2025 with a growth in RevPAR of 6.1 per cent for the first eight months of the year while Portugal and Greece saw growths of about 4 per cent over the same period.

The only two countries that are lagging behind are Turkey thanks to ongoing inflation while France is still recovering from hosting the Olympics the previous year.

Americans welcome

Mardkhah added Europe has been buoyed by a strong American market despite concerns that President Trump’s geopolitical belligerence would make them want to stay at home.

She said: “However, we can luckily say that US travellers have continued to travel to Europe and as of the month of August there is a general uplift of 5 per cent overall on US travellers coming into the continent.

“This doesn’t look like it’s going to stop anytime soon.”

She added preferred destinations for the US market are Greece, Italy, Portugal and Ireland while the once-popular UK has fallen out of favour.

Mardkhah said: “The UK is currently not doing too great due to its current inflation, less favourable exchange rates and that is then obviously keeping the American travellers away.”

Looking further afield, she added Red Sea resorts which include leisure destinations like Dubai and Abu Dhabi saw year-on-year growth of 50 per cent in September 2025 alone while Morocco is attracting more travellers in anticipation of the 2026 FIFA World Cup.

The ensuing influx means that Morocco, like Egypt, saw a 7 per cent increase in occupancy for the first eight months of 2025.

Mardkhah said: “The reason for that is predominantly because the more high-end leisure travellers have a cheaper alternative for a high-end stay in hotel accommodations that are cheaper than in other areas across the world.

“It has increased the demand towards those destinations, as well as combined with a lower increase in supply in recent years.”

By Edward Robertson