investment volume in tandem with accelerating fundamental performance .
LOOKING AHEAD As the global lodging industry continues its post-COVID recovery , look for luxury hotels to lead the pack .
From a transaction standpoint , strategic luxury opportunities will continue to be highly coveted among investors as they are rarely brought to market .
As international travel continues its recovery , so , too , should cross-border investment , which means that luxury hotel liquidity will likely accelerate even further with foreign buyers , namely sovereign wealth funds and family offices , likely to be the most acquisitive . Look for must-have assets across Europe and in select U . S . cities to be the largest recipients of foreign capital in 2024 .
Luxury hotels , particularly in gateway urban markets , stand to benefit significantly from the continued recovery of international travel . Not only do international travelers typically stay longer and spend more , which should aid in the continued growth of ADRs , but there is also a strong correlation between inbound international arrivals and urban luxury hotel occupancy .
Expect institutional investment for luxury hotels to accelerate further as debt market volatility persists , albeit improving , and luxury yields continue to trend at historic highs . Look for cash-rich Middle Eastern and Asian investors to acquire quality assets across Europe and in select U . S . markets , such as Miami and New York .
In Asia Pacific , European investors are expected to deploy capital into Japan , Singapore , Melbourne and Sydney .
There is an optimistic outlook for the global hotel industry in 2024 . As consumers continue to spend on travel , hotel performance will accelerate further with urban markets likely to lead the charge . Brands that prioritize sustainability , wellness and authenticity will have an advantage . As capital market conditions improve , most investors expect to be netbuyers over the next 12 months .
As such , traditional luxury hotel brands are expected to seize on this growing demand and expand into new verticals as they look to own the entire traveler experience . This , in turn , should create new investment opportunities as investors look to capture an increased share of the growing high-net-worth population .
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While the number of assets expected to come to market is still to be determined , market fundamentals for luxury hotels will continue to draw an increasing number of investors in the coming year .
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Mar / Apr 2024 hotelsmag . com 49