Study: Global hotel investment to grow in 2025

GLOBAL HOTEL INVESTMENT volume is projected to increase 15 to 25 percent in 2025 from $57.3 billion the previous year, according to a recent JLL study. Global hotel demand reached 4.8 billion room nights through November, 102 million more than in 2023, driving a 4 percent RevPAR growth.

JLL’s Hotels & Hospitality Group reported in its annual Global Hotel Investment Outlook 2025 that global hotel investment volume reached $57.3 billion in 2024, a 7 percent increase from 2023, but remained 17 percent below historical levels due to limited portfolio volume and declines in average deal size.

The increase was fueled by growth in the Asia-Pacific and Europe, the Middle East, and Africa regions, while transaction volume in the Americas declined modestly for the second consecutive year.

The hotel industry remains resilient, adapting to evolving travel patterns and consumer preferences, the study said.

“As we consider the transaction market in 2025, we expect to see a reemergence of two key contributors to overall volume: portfolio transactions and urban full-service hotel sales,” said Daniel Peek, JLL’s president for Americas. “We are hopeful that improved liquidity in the debt and equity markets will allow these segments to return to their traditional contributions to overall sales activity."

The study found that while RevPAR grew in all regions, performance remained uneven, with Asia-Pacific still 10 percent behind 2019 levels, while the Americas, Europe and the Middle East have fully recovered.

Key themes to watch in 2025:

• The boundaries between living, working and playing are blurring, with lifestyle hotels emerging as the new "third place". This shift is driving expansion into branded residences and alternative accommodations as hotels capitalize on the growing "Experience Economy."
• Emerging markets, particularly India and Saudi Arabia, will play increasingly significant roles in shaping future travel trends, creating new opportunities for development and investment.
• Strategic AI implementation will be crucial for optimizing hotel operations, enhancing guest experiences and addressing ongoing labor challenges.

“The hotel industry stands at a transformative crossroads, where embracing technological innovation and adapting to evolving consumer preferences will be key to unlocking unprecedented value and shaping the future of hospitality,” said Kevin Davis, JLL’s CEO for Americas.

PE deals on the rise

Private equity remained the most active global hotel buyer, with notable increases in investments from high-net-worth individuals, REITs and first-time hotel investors, JLL found. This trend is expected to continue in 2025 and beyond, with cross-border investments likely to rise as U.S. investors capitalize on a strong dollar and cash-rich Middle Eastern investors target Europe and select U.S. cities.

“Global real estate investors are increasingly gravitating to the hotels sector, evidenced by near-historic levels of first-time capital invested in 2024,” said Zach Demuth, JLL's global head of hotels research. “We expect this dynamic to continue throughout 2025 as hotels emerge as a preferred asset class, driven by outsized yields, robust operating performance, and favorable supply dynamics.”

JLL expects global hotel investment volume to accelerate in 2025, likely exceeding 2024 by 15 to 25 percent. This growth will be driven by impending loan maturities, deferred capital expenditures, private equity fund expirations, and moderating RevPAR in some markets, with the Americas expected to see the largest growth, followed by EMEA and APAC.

The luxury and select-service sectors will remain the most favored and liquid in 2025, with urban cities and high-barrier-to-entry markets attracting the most investor interest, JLL said. Foreign investment is also expected to accelerate as some investors capitalize on strengthening currencies.

The study noted that cash-rich Middle Eastern and select U.S. private equity investors will likely be the most acquisitive, targeting quality assets across Europe and Asia, respectively.

In 2025, slowing new supply will prompt hotel brands to use their balance sheets to drive net unit growth, a key driver of shareholder value, the study said. Expect increased hotel brand M&A and private equity investment in third-party management companies, non-traditional lodging brands, and lifestyle sector hotels.

CoStar and Tourism Economics made minimal adjustments to their 2025 U.S. hotel forecast, with ADR and RevPAR gains unchanged at 1.6 percent and 1.8 percent, respectively, while occupancy increased by 0.1 ppt to 63.1 percent.