Hotel investment volumes reached €8.5bn (£7.3m) in Europe, the Middle East and Africa last year - a 4% decline on 2011.

According to Jones Lang LaSalle, the most liquid market was once again the UK with €2.3bn (£1.9bn) of hotels transacted followed by France at €1.7bn (£1.5bn) and Germany at €1.2bn (£1bn).

The most dominant buyers of hotel real estate were institutional investors, which increased their market share from 17% of the entire investment value in 2011 to 24% last year. They were very active in Germany, and primarily concentrated on assets in core markets subject to stable leases.

There has also been significant interest in the UK regional markets from these types of buyers, as well as private equity funds.

The recent sale of the 42-strong Marriott hotel portfolio is the largest UK hotel portfolio transaction to complete since the financial crisis of 2007-08.

Christoph Härle, chief executive, continental Europe, at Jones Lang LaSalle Hotels & Hospitality, said: "Investor confidence was also backed by resilient operating results in a number of key markets. This was especially the case in Paris (+8.5%) and Germany where strong growth in Revenue Per Available Room was seen in Berlin (+8.6%), Frankfurt (+5.1%) and Munich (+8.5%). Even in Spain, a country largely effected by the recession, hotel performance across the country remained relatively robust. Both France, in particular Paris, and Germany saw an increasing inflow of international and regional institutional capital due to the stable performance and in Germany of the robust economic and political environment."

Further growth in trading performance is expected in a number of European markets in 2013 as worldwide travel continues to expand.

Jonathan Hubbard, chief executive, northern Europe, Jones Lang LaSalle Hotels & Hospitality, added: "A major constraint remains the persistent financing problems, with limited debt availability for new hotel acquisitions.

"Some improvements, however, can be expected in 2013 as new players such as insurance companies and pension funds start to fill the funding gap.

"Some banks have also strengthened their balance sheets and are likely to provide more funding to the sector going forward.