REPORT
reached $ 57.4 billion in 2024 and while an increase of 7 % relative to 2023 , it was the third-lowest total since 2012 . It ’ s not surprising : Central banks rolled back interest rates , but they remained obstinately high , “ making it challenging for investors to finance high-dollar trades and forcing many to the sidelines ,” the JLL report noted . Global hotel transaction volume remains 17 % behind historical levels .
Why , then , optimism for 2025 ? A clearer picture , JLL believes . It argues that core inflation is falling to central bank targets , the product of monetary easing , though promised tariffs by President Trump could upend this rosier picture . Further clarity is crucial for investors as they look to underwrite potential acquisitions , wrote JLL , and should help to precipitate hotel transaction activity . JLL expects global hotel investment volume to improve in 2025 , likely exceeding 2024 by 15 % to 25 %, with “ irreplaceable ”
WE EXPECT THE HOTEL BRANDS TO INCREASINGLY INVEST BROADER IN THE TRAVEL SPACE TO CAPITALIZE ON THE GROWING EXPERIENCE ECONOMY
– ZACH DEMUTH , GLOBAL HEAD OF HOTELS RESEARCH , JLL HOTELS & HOSPITALITY GROUP luxury hotels and properties within the select-service and extended-stay sectors remaining favored by investors . Cash-rich Middle Eastern and U . S . private equity investors will likely be the most acquisitive , JLL predicts , targeting assets across Europe and Asia , respectively .
ON BRAND Hotel brands will continue to play a pivotal role in the growth and expansion of the hospitality industry . In fact , lodging companies are increasingly spreading their dominion in areas outside traditional lodging and into adjacent spaces , such as outdoor and adventure accommodations — Marriott International ’ s recent deal for Postcard Cabins , Hilton ’ s AutoCamp partnership and Hyatt Hotels Corp .’ s Under Canvas alliance evidence of this shift . “ We expect the hotel brands to increasingly invest broader in the travel space to capitalize on the growing ‘ experience economy ,’” Demuth said .
Meanwhile , to appease Wall Street , lodging C-corps and franchisors are increasingly turning to conversions as a mode for growth against a still tepid new-construction landscape . “ Amid a challenging and high-cost construction environment , hotel brands are increasingly using their balance sheets to fuel net unit growth , a key driver of shareholder value ,” Demuth said , noting that while Hilton and Hyatt were the most aggressive in 2024 , others are expected to follow suit in 2025 as global hotel supply will grow only 2 %.
At the same time , JLL expects further hotel brand consolidation in 2025 , coupled with private equity OpCo investments , with third-party management companies , nontraditional lodging brands and hotels in the lifestyle sector “ likely to attract the most capital .”
MR . ROBOT One of the larger themes not just in hospitality but omnipresent is the role of artificial intelligence in daily life . PwC estimates that AI could add $ 15.7 trillion to the global economy by 2030 . The amount of data available to lodging companies makes the hotel industry ripe for AI disruption , though JLL still believes that the biggest contribution , for now , is in streamlining back-office operations , and not as much customer-facing applications . “ Hospitality is an inherently people-centric industry ,” Demuth said . “ Our belief is that AI should be implemented to help optimize back-of-house operations .”
This type of application , JLL posits , can improve overall profitability by improving labor models , optimizing food costs and mitigating food waste and promoting predictive maintenance that can help avoid costly PIPs . “ While not as flashy as consumer-based AI , these systems can have a material impact on the broader industry ,” Demuth said .
56 hotelsmag . com Mar / Apr 2025