Mid-range hotels and resorts that invest in experience are emerging as big winners in Europe’s changing hotel market. The new data shaping the European hotel market sends a clear message to investors: value and experience are the new “keys” to hotel profitability in Europe. Investments in midscale units and theme resorts appear to offer the most durable and attractive returns, attracting a travel audience willing to pay not for luxury amenities, but for a meaningful experience.
According to the latest HotStats data (August 2025), these two sectors are performing impressively in terms of profit margins, thanks to their simpler business models, lower operating costs and growing demand for value-added travel.
The data shows that midscale and economy hotels have gross operating profit (GOP) margins of 42% and 41% respectively. Their simpler operations and cost containment are proving to be key assets for them, especially at a time when wages and commissions are on the rise, helping them absorb the impact of these factors.
Unlike luxury hotels, which rely on price increases to compensate for inflation, mid-range hotels are achieving profitability without the same flexibility in pricing, focusing on providing a “value for money” experience that modern travelers demand.
Experience resorts: wellness and golf at the forefront
Resorts that focus on wellness and golf services are seeing the biggest increase in profit margins, investing in services such as spa treatments, healthy eating and outdoor activities. This is because they are responding to the shift in traveler preferences, who are demanding more than just a nice room. After all, travelers seem willing to spend more on experiences that combine relaxation and personal care, which enhances the profitability of these units.
Southern Europe continues to lead the way, with revenue per available room (TRevPAR) up 27% and gross operating profit per room (GOPPAR) up 38% since January 2020. This progress is not only the result of strong summer demand, but also strategic decisions made during the pandemic that are now paying off.
Stabilization with higher profitability
Overall, the European market shows signs of slowing growth in 2025, but the stabilization is accompanied by higher profitability levels compared to the pre-pandemic era. Hoteliers are now emphasizing cost control, more efficient use of space and staff, as well as the development of new revenue streams.
