he triannual meeting of the Lodging Industry Investment Council is a cross-section gathering of the hospitality industry across a variety of disciplines, from brokerage to brands, asset managers to owners.

They have a lot to say, naturally. And, oh, the times call for it. That was the context for the assemblage at the start of the Americas Lodging Investment Summit. Fittingly, since the January conference acts as a baseline, taking the initial pulse of the collective hospitality industry as it moves forward into the year.

In the headlines: ICE. And grabbing them was the alleged refusal of a Hampton Inn hotel outside Minneapolis to accommodate U. S. Immigration and Customs Enforcement( ICE) agents and immigration officers. Hilton subsequently deflagged and removed the property from its system.

The decision by Hilton was swift, but was it the right one? Mike Cahill, CEO and founder of brokerage HREC and leader of the LIIC think tank, posed this question to the group:“ ICE wants to block a group of rooms

in your nationally branded hotel. Accept or refuse?”

The response from the group was a resounding“ accept”: 83 % versus 17 %. The former’ s reasoning is clear: franchise covenants that stipulate the duty of hostelry not to discriminate or disallow guests based on their beliefs, as long as there isn’ t a perceived criminal nature or threat.( One respondent said that while they felt compelled to accept on business and contractual grounds, morally they were hesitant; they floated one idea to repel ICE business legally: remove the government rate.)

NO CAP Outside politics, the discussion turned to investment. U. S. hotel deal volumes have been well down since their 2015 apogee, when transactions hit $ 45.7 billion, according to data from JLL. In 2022, they hit $ 42.6 billion, but ensuing years have produced more muted numbers. Transaction volumes in 2025 hit $ 24 billion, and while far below 2015 levels were 17.5 % higher than 2024 and slightly higher than 2024.

Some of the deal thaw can

be attributed to lower interest rates, with borrowing costs dropping nearly 300 basis points since Fed rate cuts began in September 2024. Still, the higher cost of capital has stymied more fluid deal flow and impacted cap rates, simultaneously. Higher interest rates steepen cap rates because they increase borrowing costs, reduce demand and raise the required rate of return to justify paying more. When financing becomes pricey, investors demand lower property prices( higher cap rates) to maintain profitability and compete with safer, higher-yielding investments like Treasury bonds. Hotel cap rates hovered just over 5 % in 2025, according to CBRE data.

Where are hotel acquisition capitalization rates headed in 2026? According to LIIC members, most, just shy of 50 %, say they will be flat one year from now, with an even split of 27 % saying higher and 27 % saying lower.

One of the flatterers is Cahill, who invoked President Trump in his cap-rate thinking.“ Interest rates are not going up based on Donald Trump,”

he said. Though a sitting U. S. president doesn’ t have direct decision-making power over interest rates, Trump, on several occasions, has made his thoughts public, showing displeasure for current Fed Chair Jerome Powell. In January, Trump announced his nomination of Kevin Warsh to succeed Powell once his term as chair ends in May 2026.

Cahill’ s colleague is more bearish. Scott Kaniewski, a managing director at HREC, expects cap rates to move up as the pool of capital for assets decreases.“ There will be less offers and less buyers and asset values will go down,” he said, adding that he expects interest rates to move up, not down.

At the same time, Charles Oswald, president and CEO of third-party management company Aperture Hotels, said cap rates will slightly compress, predicting that labor statistics would be an impetus for the Fed to lower interest rates. The Fed typically would lower interest rates when unemployment rises as a method to allow businesses to expand more readily.

Some, like John Hamilton, EVP of Pyramid Global

78 hotelsmag. com May / June 2026