Hotel industry in Europe - statistics & facts
From the glamourous coastline of the French Riviera to the brutal beauty of the Norwegian fjords, travelers can be found in all corners of Europe. With a wide variety of cultures and landscapes on offer, tourism in Europe is unsurprisingly a booming industry. However, some tourism segments generate more revenue than others. In 2025, the revenue of the hotel market in Europe exceeded 120 billion U.S. dollars, representing the second-highest profitable market segment in the region’s travel and tourism sector, after package holidays. These days, due to the competitiveness of the European hotel market, many companies are distinguishing themselves by incorporating future-facing initiatives like sustainability and artificial intelligence (AI).
What are the most popular hotel destinations in Europe?
Given that Southern/Mediterranean Europe was the region with the highest number of international tourist arrivals worldwide in 2025, it would be easy to assume it was also the European region with the highest monthly hotel occupancy rates. However, this accolade went to Northern Europe that year, with an occupancy rate of over 80 percent from June to September 2025. While tourist hotspots in Northern and Western Europe, such as London, Paris, and Amsterdam, also ranked high in a list of the European cities with the highest hotel average daily rates (ADRs), it was Rome that reported the highest ADR in 2024.
Digitalization of the European hotel industry
Much of Europe’s charm might be rooted in its history, but its hotel industry has certainly embraced modernity. In 2025, online channels were estimated to have generated as high as 81 percent of sales in the European hotel market. Despite a love-hate relationship between hotels and online travel giants such as Booking Holdings and Expedia Group, as online travel agencies (OTAs) take a cut of a hotel’s profits when facilitating bookings, OTAs have undeniably played a big role in boosting the digitalization of Europe’s hotel market. Now, the increasing implementation of AI in hospitality could revolutionize everything. In 2025, roughly 40 percent of surveyed hotels in Europe reported having used artificial intelligence in operations. This share rose to almost 60 percent when also including those establishments that planned to adopt AI in the near future. This shows that, although it is still too early to understand whether AI will favor direct bookings or solidify OTAs’ leading position, interest in experimenting with this new technology is high among European hotels and might strengthen this already very profitable market even further.
