How can independent hoteliers in Europe optimize their pricing for Summer 2025?

This article, which examines Lighthouse’s rate data from approximately 16,200 independent hotels across Europe for summer 2025, reveals a clear split. In some cities, summer rates are surging. In others, they're flattening or dipping after event-driven peaks or long stretches of steady growth.

For independent hoteliers, understanding which of these stories applies to your city is the key to a successful summer. 

This guide breaks down pricing patterns across key European regions and helps you spot which profile fits your city. Alongside the data, you’ll find simple, practical tips to adjust your strategy and capture more revenue this summer.

European hotel room pricing at a glance for summer 2025

• The biggest summer rate increases for 2025 are in the Nordics and the Balkans. Iceland (+20.0%), Sweden (+11.6%), Montenegro (+15.3%), and Albania (+11.4%) are all seeing strong year-on-year (YoY) growth – especially notable for Iceland, which had seen prices dip last year from the highs of 2023. 

• In contrast, southern Europe’s largest tourism markets are cooling down. Summer rates are down in Italy (-8.1%), Spain (-4.7%), and Portugal (-3.5%) following a period of sharp growth through 2023 and early 2024.

• Germany (-3.3%) and France (-2.8%) are also seeing summer prices settle after event-driven highs during the 2024 UEFA Euros and Olympics. These drops reflect a return to more typical seasonal pricing.

Regional pricing snapshots: What’s happening across Europe 

Looking at the regional picture, some areas are showing strong summer demand, while others are settling back to more typical levels after earlier highs.

Balkans

Summer hotel rates across the Balkans are rising sharply, with Montenegro (+15.3%) and Albania (+11.4%) leading the way. 

It’s a strong rebound after a slower start to the year. City-level trends are even more striking; Sofia (+17.1%) and Bucharest (+10.5%) are showing some of the region’s highest growth. Tirana is climbing more slowly (+1.7%), but still heading in the right direction.

Baltics

Summer rates are up across the Baltics, with Lithuania (+10.9%), Latvia (+10.3%), and Estonia (+8.7%) all posting solid gains. It’s a welcome shift after a quieter period earlier in the year. Key cities like Tallinn (+13.5%) and Vilnius (+12.9%) are leading the way with particularly strong demand.

Benelux

Prices in the Benelux region suggest cautious optimism for summer 2025. The Netherlands (+4.6%) and Belgium (+3.3%) are seeing modest increases after a more challenging year. 

Luxembourg's hotel pricing remains flat (-0.2%). Cities like The Hague (+14.6%) and Antwerp (+8.7%) are outperforming, but key destinations such as Amsterdam (+0.3%) and Bruges (0%) are showing little to no movement.

Central & Eastern Europe

Summer 2025 hotel pricing in Central & Eastern Europe is mixed. Slovenia (-7.3%) and Hungary (-3.8%) are seeing broader market easing, but key city-break spots are bucking the trend. Budapest (+7.4%), Prague (+3.7%), Wroclaw (+17.0%), and Krakow (+10.2%) all show solid growth, pointing to strong, ongoing demand for top leisure destinations.

DACH (Germany, Austria, Switzerland)

Austria (+7.1%) continues to show strong summer rate growth, with Vienna (-5.0%) being a notable exception. Switzerland’s national summer rates are stable (-0.9%), but premium spots like Zermatt (+29.5%) show serious growth. In Germany, rates are correcting after the Euro 2024 boost, with steep drops in key cities like Frankfurt (-18.4%), Cologne (-14.7%), and Berlin (-11.1%).

France

Summer prices for hotels across France are slightly lower than last year (-2.8%), easing back after the spike caused by the 2024 Olympics. Lyon (-11.0%) is seeing rates settle, while the French Riviera is still going strong; Cannes (+24.9%) and Nice (+7.9%) are both well up. 

Paris is bucking the national trend with a +12.3% increase, thanks in part to major events like the Paris Air Show in June and, perhaps, a return to the city for many travelers who were looking to avoid the Olympic craze.

Mediterranean

Summer hotel rates are cooling in the Mediterranean’s biggest markets YoY – Italy (-8.1%), Spain (-4.7%), Portugal (-3.5%), and Greece (-2.6%) – after last year’s sharp spikes. But it’s not all softening: Several islands are booming, including Lanzarote (+39.4%), Menorca (+22.5%), Gran Canaria (+21.8%), and Crete (+17.1%).

Meanwhile, higher-priced destinations like Santorini (-14.0%), Ibiza (-3.9%), and Sardinia (-8.9%) are seeing summer drops, pointing to a shift in demand toward better perceived value.

Nordics

Summer demand is rising across the Nordics, led by Iceland (+20.0%) and Sweden (+11.6%). Finland (+5.5%) and Norway (+3.1%) are also trending upward. Reykjavik (+26.0%) and Gothenburg (+25.0%) stand out as two of Europe’s fastest-growing cities. Denmark is the outlier, with prices dipping slightly (-3.9%).

UK & Ireland

Summer prices are rising steadily in both the UK (+3.5%) and Ireland (+3.3%) following a mostly flat year. Regional cities are driving growth, with Cardiff (+23.4%), Liverpool (+17.5%), and Cork (+14.7%) seeing standout increases. 

By contrast, northern cities like Manchester (-7.7%) and Glasgow (-7.0%) are slightly behind last year’s levels. The capitals remain stable, with Dublin (+3.7%) and London (+2.2%) posting modest gains.

A closer look at hotel room prices in select European destinations in summer 2025

National averages give us a big-picture view, but for independent hoteliers, what’s happening on your street matters more. Demand and pricing can vary wildly, even within the same country. 

This section looks at cities and destinations where summer 2025 is shaping up differently from the national trend, offering a more practical view of where the real opportunities (or risks) lie.

Markets with strong room price growth

These are the destinations where advertised rates for summer 2025 are up significantly compared to summer 2024. In some cases, this reflects a bounce back from softer performance last year. In others, it’s a continuation of steady upward pricing.

This growth is happening across market types. It spans:

• High-end leisure destinations like Zermatt, Reykjavik, and Cannes – all posting double-digit growth at rates above $280.

• Mid-market cities like Gothenburg, Cardiff, and Vilnius – climbing fast, with prices in the $170-$260 range.

• Affordable but fast-growing urban centers like Clermont-Ferrand, Wroclaw, Sofia, and Zaragoza – where rates remain under $140, even after strong year-on-year increases.

How to respond? Key actions for this market profile

• Look at how your rates compare to others in your area. If you're significantly cheaper than similar properties nearby, there's likely room to increase.

• If bookings are coming in faster than last summer, consider raising rates on high-demand dates sooner rather than later, before they fill up.

• Watch which room types are selling out first. If your higher-priced options are going early, it could be a sign your base pricing is too low.

• Limit one-night stays on your busiest dates. That way, you keep more space open for longer, higher-value bookings.

• Relook at your distribution strategy and try to optimize your direct channels to reduce your cost of acquisition on high demand dates.

Markets holding with consistent year-on-year room rates

These are the destinations where advertised rates for summer 2025 are roughly the same as last year, rising or falling by less than 2%. Prices haven’t dropped significantly, but they’re not showing much growth either.

In some markets like London, Barcelona, and Lisbon, rates appear to have levelled off after several years of strong gains. They’ve reached a natural ceiling where further increases may risk dampening bookings.

In others, like Naples or Porto, pricing has held steady while nearby destinations continue to climb. That could be a strategic decision to stay competitive, or a sign that market demand is flatlining.

Premium destinations like Mykonos ($543) are still among Europe’s highest-priced, despite only modest increases from 2024. Like many other destinations in this category, the advertised rates are still down from their high points in the summer of 2023 when revenge travel peaked. 

While average rates are flat year-over-year, individual hotels within the market will likely vary significantly in how they compete.

When rates hold steady, hotels differentiate through packages, service, and flexible policies. Guests make choices based on perceived value, not just price.

For hoteliers trying to achieve their financial targets, even small differences can add up. A $200 room booked at 80% occupancy last year won’t yield the same result if you're only filling 65% now.

Holding your rate might feel safe, but if competitors are adjusting promotions or adding extras, your offer could be out of sync, even if your rate hasn’t changed.

How to respond? Key actions for this market profile

• Monitor booking pace closely. If you’re ahead of last year, you might have room to raise rates on key dates. If you’re behind, pricing may not be the issue; check your online visibility, positioning, and guest reviews.

• Focus on perceived value. In a flat market, it’s the extras that make you stand out. Flexible cancellation, well-designed visuals, an easy booking process and thoughtful add-ons can be the decider in turning lookers into bookers.

• Avoid reactive discounting. Don’t discount too quickly. If occupancy is on track, or if bookings tend to come closer to arrival, maintaining your rate might still yield stronger results than cutting it.

Markets seeing a hotel room price decline 

Some destinations are seeing clear year-on-year price drops for summer 2025, ranging from small adjustments to more noticeable declines. In many cases, this reflects a return to normal after inflated 2023 and 2024 pricing. In others, it could point to softer demand, increased competition, or shifting traveller preferences.

What’s driving the change varies by market. That’s why the right response isn’t always to cut rates – it depends on why prices are falling, how demand is pacing, and how your property is positioned.

Germany stands out for the consistency and scale of its declines. Frankfurt (-18%), Düsseldorf (-17%), Dortmund (-17%), Cologne (-15%), Berlin (-10%) and Stuttgart (-10%) have all seen meaningful drops in advertised rates. 

These are major cities that hosted matches during Euro 2024. Rates had climbed in anticipation of the event; now, those temporary premiums are gone.

Leisure destinations are also adjusting. Places like Venice ($400), Santorini ($445), Ibiza ($480), and Sardinia ($299) still rank among Europe’s highest-priced markets. But each has seen a drop of 5-12% compared to last summer. 

There’s also a gap opening between expensive mainland destinations and more value-driven islands. Marbella, for instance, is down 21%, the steepest drop in the destinations we looked at. Valencia is down 7%. Yet island destinations like Lanzarote (+38%) and Crete (+23%) are growing. 

These adjustments likely reflect more cautious consumer spending and a recalibration of what guests are willing to pay.

How to respond? Key actions for this market profile

• Watch your booking pace and positioning. If you’re behind where you were last summer, check how you’re showing up against nearby competitors. Are others dropping rates more aggressively? Are you showing up clearly on key channels?

• Add value before cutting the price. Instead of blanket discounts, test packages, extras, or targeted offers. A rate with breakfast or parking included might convert better than deeper discounts alone, without weakening your overall price position.

• Adjust strategy by segment. If international travel is softer, look at domestic or regional demand. If weekends are busy but midweeks are quiet, adjust promotions accordingly.

• Track lead time closely. If bookings are coming in later this year, don’t panic too early. But if you're seeing slow pick-up even within your key booking window, it’s time to take action.

• Control what you can. If hitting your original summer target looks unlikely, focus on what you can control. That might mean adjusting operations, reducing costs on low-demand days, or incentivizing longer stays.

Your summer 2025 action plan

Summer 2025 presents a complex but manageable landscape. While the market is no longer rising universally, the opportunities are significant for those who understand their local context. By identifying your market's unique profile and focusing on a data-driven strategy, you can have a successful summer season. 

To ensure you’re making the most of summer 2025, here are five key actions to take:

1. Know your story
   First, identify your market’s profile from this report. Then establish your baseline, was your summer 2024 a "normal" year, or an artificial peak due to a major event? This context is the foundation for all your decisions.

2. Dig into the data
   How does your booking pace for July and August compare to this time last year? Who are your top 3 competitors, and how are they priced for key weekends? Use this data to see if you are on track.

3. Act on opportunities and risks
   Pinpoint the biggest demand drivers in your city this summer and ensure your rates and stay restrictions are optimized for it. They could be events, festivals, weddings. Then, find your period of highest risk (e.g., a quiet midweek week) and check that your pricing is competitive.

4. Refine your offer
   Don't just compete on price. Look for opportunities to add value through exclusive packages or superior service that your competitors can't easily match and spotlight the uniqueness of your property.

5. Ensure your offer is seen by your ideal guest profile
   Optimizing your rates is pointless if your ideal guest doesn't see it. Review your channel mix to ensure you are visible where your target audience is booking. Invest in high-quality photos and clear descriptions that highlight the value you offer, especially in stable or correcting markets.

Staying on top of shifting demand, competitor pricing, and market fluctuations is hard enough and even harder when you’re fully caught up with running a property during its busiest period. 

Lighthouse’s platform for independent hotels automates the entire pricing process: it analyzes live market demand, tracks your competitors’ rates, factors in your occupancy levels, and recommends the best price for every room, every day. Those rates are then automatically pushed to your booking channels – no spreadsheets, no copy-paste errors, no delays and no worry that you are missing out on fleeting opportunities, nor valuable time with your guests.

You also have full control to set the parameters you want. You stay competitive, consistent, and confident, with a pricing strategy that adapts in real time. It’s the kind of data-driven approach you’d expect from a major hotel group, but built for independents. And effortless to run.

Find out more about the platform, by contacting our team.