The latest Global Hotel Investor Sentiment Survey conducted by JLL’s Hotels & Hospitality Group indicates a robust optimism for U.S. hotel investments in 2025. This positive outlook is largely attributed to recent cuts in Federal Reserve interest rates and solid operating performance in major markets.
Analyzing over 8,200 data points from global hotel investors managing more than $50 billion in hotel assets, the survey surfaces several encouraging trends for the U.S. hotel industry.
“As we approach 2025, there’s a palpable sense of optimism among hotel investors,” noted Zach Demuth, global head of hotels research at JLL. “With interest rates stabilizing and strong hotel performance coexisting, we expect 2025 to be a pivotal year for U.S. hotel investment, particularly with urban markets and luxury properties drawing both domestic and international investments.”
Following three years of subdued market conditions due to economic uncertainty, capital market disruptions, and geopolitical volatility, investor sentiment is showing signs of recovery in the global hotel market.
A remarkable 80% of investors indicate plans to either maintain or increase their capital commitments to the hotel sector over the next year, marking the highest percentage recorded since the inception of the survey in 2000.
Recently, the global hotel investment volume has gained momentum, with year-to-date Q3 liquidity reaching $40.9 billion—a 10.2% increase from 2023. This boost in confidence is significantly influenced by the expectation that interest rates will stabilize, with 95% of investors predicting their overall capital costs will either remain steady or decline in the upcoming year. This aligns with the prevailing macroeconomic perspective that most central banks are nearing the end of their rate-tightening phases.
The stabilizing financial landscape is also fostering a revival in cross-border investments, with 57% of investors keen to allocate more capital outside their domestic markets. North American investors are particularly focused on European assets, motivated by the strong U.S. dollar and strong market fundamentals. Conversely, Asian investors are increasingly interested in U.S. markets, targeting value-add opportunities and potential acquisitions.
Urban areas, in particular, are becoming favored destinations for hotel investments in 2025, with 78% of investors planning to direct most of their hotel investment capital towards cities in the next year. Noteworthy examples include New York City and San Francisco, which are emerging as key targets for international investors.
San Francisco is drawing interest from investors in Asia, the Middle East, and Europe due to its slower recovery trajectory and growth potential, especially in light of the tech sector’s resurgence and the uptick in international travel. Conversely, New York City is demonstrating strong performance, attracting investors from the Middle East and Asia who are eager to capitalize on continued growth, particularly in the luxury segment.
As cross-border investment activities surge, the survey also reveals a significant influx of first-time hotel buyers, representing 27% of investment volume through September. This trend is transforming the investment landscape, with private equity firms, high-net-worth individuals, and family offices leading the way.
The article “JLL Survey: U.S. Hotel Investment Poised for Growth in 2025” originally appeared on hotelbusiness.com.
