Leading hotel groups across Europe are shifting their focus from traditional Mediterranean coastal resorts to smaller towns and rural destinations, responding to a surge in tourism and growing concerns about overcrowding in popular cities. This strategic pivot is driven by increasing international visitor numbers and changing tourist preferences, industry executives say.

In 2025, Europe attracted approximately 794 million international travelers, representing over half of all global tourist arrivals, according to the United Nations’ World Tourism Barometer. The European tourism sector contributes nearly 10 percent of the European Union’s gross domestic product, underscoring its significant economic role. However, the influx of visitors has intensified pressure on crowded urban centers, especially along the Mediterranean coast, leading to strained local infrastructure and rising tensions with residents.

Dimitris Mankis, European head of Wyndham Hotels & Resorts, explained that the company is targeting boutique properties in second- and third-tier cities as part of a broader change in strategy prompted by social media’s role in revealing lesser-known destinations to travelers. Similarly, JLL’s head of hotel research for Europe, the Middle East, and Africa, Joe Stather, noted a growing demand for locations that are “less internationally saturated.” He highlighted a shift in momentum within Spain and Italy toward inland and northern regions, including mountainous areas, rural towns, and smaller islands.

InterContinental Hotels Group (IHG) Chief Executive Edie Maalouf echoed this trend, emphasizing the broadening appeal of Europe’s more tranquil destinations. IHG’s recent openings include hotels in Valladolid, a northern Spanish city, and Braga, a small inland Portuguese city. Maalouf remarked that many of these less-visited places offer a more enjoyable experience precisely because they avoid the crowds typical of established hotspots.

The expansion beyond crowded coastal resorts also comes amid growing local resistance to overtourism. In Palma, the largest city on the Balearic island of Mallorca, an estimated 25,000 people attended a protest last month decrying the impacts of mass tourism, including environmental damage from construction and rising living costs that are pricing locals out of housing.

Despite challenges such as wildfires that disrupted travel during the peak season, inbound tourism remains robust. U.S. travelers, in particular, continue to flock to Europe in large numbers. Data from the U.S. National Travel and Tourism Office indicate that American visits to Europe reached 23.3 million last year, with growth of more than one million trips projected for 2024. Tourism Economics forecasts a 5.1 percent increase in U.S. travel to Europe this year.

Maalouf also pointed out that many independent European hotels are seeking partnerships with international groups like IHG to attract high-spending American tourists. This demand for branded accommodation reflects the continued importance of the U.S. market to the region’s tourism industry as it expands beyond its traditional coastal hubs.