Hotel sector to see 'robust' investment growth, says JLL

JLL's latest Global Hotel Investment Outlook identified that strong debt markets, record dry powder and reestablished confidence in the sector's resilience were creating optimal conditions for accelerating investment activity in 2026.

Global hotel transaction volumes demonstrated significant momentum in 2025, with direct investment up 22% from the 2023 trough. The Americas region led growth with a 27% increase in transaction volumes, while EMEA posted 4% growth. Asia Pacific experienced a 20% decline, though resilient travel volumes and performance fundamentals position the region for a rebound in 2026.

Hotels reclaimed their historical share of commercial real estate investment, accounting for approximately 8% of global investment volumes in 2025, surpassing the long-term average and demonstrating the sector's renewed appeal to institutional investors.

Several key factors are driving the positive investment outlook for 2026:

- Robust travel demand: Global air passenger volumes are projected to grow 4.9% year-over-year, with Asia Pacific leading at 7.3% growth driven by strong patterns in India, China and Vietnam.

- Supply constraints create value: Slower supply growth across major markets will underpin performance of existing hotels, with most major U.S. cities showing construction pipelines below 2% of existing supply.

- Improved capital market conditions: Debt markets have strengthened globally with increased lender appetite and better pricing, while equity capital remains abundant, supporting increased transaction activity.

Regional outlook highlights targeted opportunities

Luxury resorts and trophy assets are emerging as top investment targets, driven by compelling supply-demand dynamics and institutional appetite for irreplaceable assets. The 2026 FIFA Soccer World Cup and America's 250th anniversary celebrations are also expected to drive significant lodging demand spikes in major cities.

"We're witnessing a fundamental shift in investor sentiment toward hotels, driven by compelling relative value and the sector's proven resilience," said Kevin Davis, CEO, Americas, JLL Hotels & Hospitality Group. "The 2026 FIFA Soccer World Cup represents a unique catalyst for performance in host cities, while constrained supply dynamics create lasting value for existing assets."

"The era of uniform recovery is decisively over. We're now in a phase of strategic sorting, where discerning consumers and targeted capital are creating a great divergence in the market. Experience-led, high-quality assets are commanding a significant premium, a trend partly fueled by growing global wealth chasing irreplaceable European hotels," said Will Duffey, CEO, EMEA, JLL Hotels & Hospitality Group.

"This dynamic, coupled with substantial private equity capital on the offense, is creating distinct opportunities – from acquiring trophy assets to large-scale, strategic repositionings. With hotels consolidating a larger share of European real estate investment and a muted construction pipeline supporting values, a compelling window has opened for investors to act."