WHAT INVESTORS WANT Two sectors on opposite ends of the spectrum have emerged as the most appealing and liquid for U . S . hotel investors : irreplaceable luxury assets and select-service and extendedstay hotels . With global wealth continuing to rise over the long-term , as well as the growing appeal for unique travel experiences , luxury hotels are anticipated to remain the most favored among investors in 2024 , particularly those who are less reliant on leverage . The increased demand for irreplaceable luxury assets has spurred a notable rise in luxury hotel liquidity post-pandemic . |
In 2023 , the number of singleasset luxury hotel transactions reached the third highest level in the past seven years , totaling 39 .
On the other side of the spectrum , select-service and extended-stay hotel liquidity has grown significantly since the pandemic . In 2023 , the sector accounted for 52.5 % of U . S . hotel liquidity , the highest portion in history . Investors will continue to gravitate toward the sector due to its smaller check sizes , strong operating performance and growing yields . Expect this juxtaposition of acquisition composition to persist through 2024 and beyond .
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FINAL THOUGHTS The U . S . hotel industry is expected to deliver robust performance in 2024 , with urban markets leading the way . This supports the increased optimism for accelerated hotel investment activity over the next 12 months as capital market dislocation eases , reflected in a positive investor sentiment and an accommodative signal from the Federal Reserve to lower interest rates next year earlier and faster . Financial pressures and dispositions stemming from expiring private equity funds ’ life cycles will also create opportunities for investors to acquire assets . |
U . S . hotel investment is poised to rebound , with a focus on luxury and select-service and extended-stay hotel assets in top urban markets . Collectively , these factors signal a positive outlook for accelerated U . S . hotel investment in 2024 .
Ophelia Makis , JLL
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38 hotelsmag . com Jan / Feb 2024 |