CBRE has launched its first data-driven hotels index, ranking London as Europe’s most investible market.

The analysis looks at the top 66 hotel investment markets across Europe, scoring destinations across a range of key structural factors, macroeconomic fundamentals and qualitative attributes.

London tops the index with a composite score roughly 25% higher than any other destination, underpinned by the market’s size, demand and liquidity.

Paris follows, supported by visitor volumes and strong revenue per available room (RevPAR) performance.

Southern Europe accounts for nearly half of the top 30 destinations, led by Spain, Portugal and Italy. The index records visitor volumes 20% to 30% above the continental average for Madrid, Barcelona, Lisbon and Mallorca, while Rome, Milan, Venice and Florence outperform on demand and pricing power, despite moderate liquidity.

Meanwhile, Mallorca outscores Paris in terms of market size. Other leisure islands such as Tenerife and Gran Canaria also rank in the top quartile, reflecting sustained rate growth and constrained new supply.

Across all destinations, inbound arrivals and total overnight stays account for nearly 70% to 80% of index performance, reinforcing the link between tourism vitality and investment confidence.

Kenneth Hatton, head of hotels, Europe, at CBRE, said: “The index should be a great new reference point for investors seeking a data-driven analysis of markets that suit their investment thesis.

“Its strength lies not only in its foundations of deep historical data, but also the forward-looking projections of the key sector economists. While the major gateways will come as no surprise, it’s refreshing to see some disruptors to the traditional narrative. I expect the annual updates should be an essential reference point for the evolution of investment plans.”