Europe has seen rapid growth in luxury resort investments in recent years. By 2020, total investments exceeded $15 billion, with over 200 new luxury resorts opened. Key factors driving this boom include rising high net worth population, increasing tourism, and strong government support. However, choosing the right luxury resort company to invest in is crucial to maximize returns while minimizing risks.
European luxury resort market saw exponential growth recently
The European luxury resort market has expanded at an average rate of 8% per year from 2015-2020. Key luxury travel destinations like France, Italy, and Spain saw double-digit growth annually. The high net worth population in Europe also witnessed steady growth at 4-5% per year, driving demand for luxury accommodations. Emerging destinations in Eastern Europe further reinforced the boom.
Lower investment risks with top European luxury resort firms
Marriott, Hilton, Hyatt, and Four Seasons are the leading global luxury resort companies with operations across Europe. Their established brand names, high standards, and operational expertise result in higher occupancy rates and returns for investors. Additionally, they undertake much of the development and management responsibility, reducing investor risks significantly.
Government incentives encouraged luxury resort investments
Many European governments offered generous incentives for luxury tourism investments in less developed regions to boost economic growth. This included subsidized lands, tax holidays, simplified approval processes, and co-funding of promotion costs. As a result, newer destinations like Croatia, Cyprus, and Portugal attracted billions in luxury resort investments.
Market trends point to strong continued growth potential
Europe’s aging yet wealthy population, rising experience-seeking travelers from China and India, and zones for sustainable tourism development identified across the continent are key trends that will fuel further growth of this sector. Leading industry reports project the European luxury resort market to expand at a CAGR of over 7% from 2020-2025, outpacing the global average of 5%.
In summary, the European luxury resort investment market witnessed exponential growth before 2020 on factors like rising wealthy population, booming tourism demand and government support. Investing in established luxury brands lowered risks and gave higher returns. Continued strong growth is expected as market trends remain favorable.