Not long ago, leisure was the risky end of the investment spectrum. It was seen as too seasonal, too dependent on fickle tourists and good weather. Yet, at the Resort & Residential Hospitality Forum 2025, it was clear that the script has flipped. Resort real estate has graduated from niche to mainstream, and the capital chasing it is increasingly institutional as many line up to acquire such assets.
A new era
Across the Mediterranean, constrained supply, rising demand and the global pivot toward experiences are fuelling a new golden age for leisure investment.
“Fundamentals of the industry are very, very strong,” says Sergio Carrascosa of Hotel Investment Partners, noting that demand is outpacing new supply as he added “growth in supply is quite limited.”
The result is scarcity value. The pandemic reshuffled travel preferences and accelerated the demand for meaning, escape and connection, all of which the resort product naturally delivers.
As KSL Capital’s Tina Yu explained, “We’ve always pivoted toward what we call defensive leisure spend. When a crisis hits, companies might skip a conference and make travel cuts but telling your family they can’t go on holiday is a much tougher conversation to have and decision to make”
That resilience has translated into financial stability. Resorts consistently recovered faster than city hotels after every major downturn, from the financial crisis to Covid-19. And it turns out for investors, that track record is hard to ignore.
Carrascosa observed that the buyer pool has evolved as dramatically as the product. “Ten to fifteen years ago, it was more opportunistic private equity entering the market. Now, more and more institutional capital is entering the market.”
This institutionalisation is aiding a boom in interest. According to Colliers and CBRE data, leisure-led transactions accounted for a growing share of Europe’s €22 billion in hotel deals last year, a striking reversal from the pre-Covid years when business-travel assets dominated.
Southern Europe’s sweet spot
If one geography embodies the sector’s momentum, it’s Southern Europe. Greece and Italy drew particular praise for their fundamentals, namely attractive yield profiles, strong airlift and a mix of scale and scarcity.
“Greece probably has the best fundamentals in the Mediterranean from a growth perspective,” said Javier Arús, senior partner at Azora. “It has land to develop new products that align with what the guest is looking for and it’s capturing the high end of the market.”
Italy, meanwhile, still holds vast potential. Its ownership base remains highly fragmented, with family-run coastal hotels ripe for conversion and repositioning.
Beyond the familiar destinations of Spain and Portugal, emerging markets such as Croatia, Cyprus and Albania are peering in. Their smaller scale offers higher growth potential although success still hinges on stable infrastructure and political reliability.
Beyond the room
But resort investment today isn’t measured simply in rooms or revpar. The modern asset is an ecosystem, one that generates income from spa memberships, golf, wellness, beach clubs and gastronomy as much as from beds.
KSL Capital has long built its strategy on that model. “Traditionally, we've always looked at more what can you do to build out those experiences that enhance your ability to drive more cash flow out of the same square footage,” Yu said. “It might make your price-per-key look a bit wonky but it generates more yield and more stable cashflow. Being able to offer your customers something a little bit different, whether that's the restaurant space or the beach club or whatever you're creating to actually drive occupancy, that’s really important.”
And experience isn’t an afterthought; it’s embedded from day one. Carrascosa explained how HIP approaches each project holistically, from concept to masterplan. “We think about the kind of client we want to attract, the brand that fits, and build the experience around that from the start.”
That philosophy is even more relevant as today’s traveller continues to expect personalisation and authenticity.
ESG
No major investor can afford to overlook sustainability but in resorts it’s particularly existential. Many are located in environmentally sensitive coastal or mountain settings and their long-term value depends on the preservation of those environments, Yu stresses.
She argues investors must go beyond metrics to protect both the communities and natural settings on which their assets depend. “If we don’t take care of where we are, and we don’t take care of our people, the business isn’t going to be sustainable.”
Carrascosa agrees with this sentiment further stressing the business sense of being ESG conscious.
Looking ahead, the experts predict that the future of Mediterranean resort investment looks premium, and consolidated. A decade ago, much of the coastline was lined with midscale, independent hotels. That front line is rapidly upgrading as conversions into branded five-star properties accelerate.
At the same time, demographics are working in the sector’s favour. Younger generations travel more frequently and value experiences over possessions, while ageing baby boomers remain active travellers. “The mentality has shifted completely,” said Arús. “Investing and being exposed to leisure travel is unstoppable.”
Yet challenges remain. Rising airfares and potential environmental restrictions on travel could temper growth. Maintaining value-for-money perception - not cheap but commensurate with quality will be crucial, Yu emphasised. “Even the most affluent customer understands value,” she said. “It’s about whether the service, the F&B and the overall experience justify the spend.”
As capital continues to flow into resorts, it’s clear that investors are no longer dabbling. Rather, they’re treating it as a core play.
Carrascosa captured the prevailing mood: “It’s been solid for the past ten years, and it will be solid for the future. For sure, the market has changed in the last 10 years. But you can find very good opportunities. We still see that there are opportunities for value add conversions with these hotels that are still in the market.”
For an industry once considered too volatile to institutionalise, that sounds a lot like confidence.