According to JLL’s latest Global Hotel Investor Sentiment Survey, the hotel investment sector is experiencing a “wave of renewed optimism.”
Though global hotel investment volume has been “sluggish” in 2024, activity strengthened in the past three months, with year-to-date Q3 liquidity reaching $40.9 billion, an increase of 10.2 percent relative to 2023. After more than two years of rising debt costs from most of the world’s largest central banking institutions, The European Central Bank and The Federal Reserve in the U.S. have finally started to cut rates, signaling renewed optimism for global hotel investors.
Investors now expect that deal flow will accelerate “meaningfully” in the next 12 months, catalyzed by increased debt-market clarity, impending loan maturities and significant deferred capital expenditures. Amid broader real estate volatility, hotels have emerged as a preferred asset class driven by their ability to generate better risk-adjusted returns and their inherent hedge against inflation. Investors expect to be most active in urban markets, with irreplaceable luxury and extended-stay assets likely to be the largest recipients of capital. Look for foreign investors to be increasingly acquisitive targeting both value-add hotel assets and operating/brand platform opportunities.
An “unprecedented” 80 percent of investors plan to maintain or increase their capital investment in hotels over the next 12 months. This surge in confidence is driving cross-border investments to new heights, with 57 percent of investors looking to deploy more capital outside their home regions. Urban markets are emerging as prime targets, with several global cities positioned to attract significant investment.