Hotel Investment Today advisory board members
chime in on the expected deal pace as a new year once again creates bigger
expectations.
NATIONAL REPORT – Deal volume was disappointing once again
in 2025 with PwC noting deal value dropping substantially with transaction size
down 55% on average.
Will recent Fed activity start to loosen wallets? Will
lenders return to the space with more conviction? Will distress finally reach a
point of no more can kicking? Will REITs be the deal de jour? Or will soft
performance forecasts lead to further pauses by equity players?
On the REIT side – something has to give. However, fairly high interest rates remain an issue for M&A in the REIT space. C Corp unit growth remains a big challenge with low supply growth so likely activity in that space.
David Duncan
Hotel Investment Today reached out to its advisory board for
some answer. We asked them if all the promises of a pronounced pickup in
M&A will finally come to fruition in 2026? Here are their responses:
Sean Hehir, managing partner, Trinity Investments
“We anticipate a stronger market in 2026 – driven by private
equity, strategic/transformative deals, and a release of pent-up demand from
2024-2025. In particular, we believe PE-backed deals, buyouts, and
take-privates as key drivers of M&A activity.”
Ben Rafter, CEO, Hotel Equities
“Distress and fatigue may cause M&A to tick up, albeit
with Marriott’s embarrassing Sonder problem it likely won’t be coming from the
big flags. Management companies are looking for alternatives as a lot of
CEOs/owners/founders held on through COVID and are now five years out looking
for things to do. Hence the “fatigue” commentary. Properties themselves are
going to find themselves in distress and something may actually happen this
year.”
David Duncan, president and CEO, First Hospitality
“On the REIT side – something has to give. However,
fairly high interest rates remain an issue for M&A in the REIT
space. C Corp unit growth remains a big challenge with low supply growth
so likely activity in that space.”
With declining ‘demand’ (domestic and especially International), I don’t think there is real upside for new buyers unless the Fed opens up the spigot. Our industry needs a reset on “basis,” which no one wants to face.
Eric Jacobs
Eric Jacobs, chief global growth officer, Aimbridge
Hospitality
“I am not convinced the lenders are ready to push the button
yet. If there is any way current administration can find a way to lower the
rate to open more dollars back into the market then there may be chance. But
with declining ‘demand’ (domestic and especially International), I don’t think
there is real upside for new buyers unless the Fed opens up the
spigot. Our industry needs a reset on “basis,” which no one wants to face.”
Adi Bhoopathy, managing principal, head of Capital Markets,
Noble Investment Group
“It has been an active transaction year for Noble, but the
overall transaction market has been muted for the past couple of
years. Yes, we expect an uptick in hotel M&A in 2026, driven by
stabilizing capital markets, owners facing refinancing challenges/PIP costs,
and increased underwriting visibility, creating a ‘perfect recipe’ for
increased transaction activity.”
Glyn Aeppel, founder, president, CEO, Glencove Capital
“Renewed liquidity (especially credit) is reactivating deal
flow, which should be demonstrated through increased M&A and transactional
activity. While there remains a gap between buyers and sellers regarding
valuation, I am hopeful that this will narrow and results in action.”
Philip “Flip” Maritz, managing director Broadreach Capital
Partners, co-founder, Maritz, Wolff & Co.
“I expect more M&A but muted, helped by better debt
capital markets plus accelerated action on distressed loans.”
M&A will creep back up in 2026, but I don’t expect a massive change. Many deals are still within their execution periods and while the environment will be more welcoming it will still be a selective market, not a rush that pulls everyone along.
David McCaslin
Maki Nakamura Bara, president, co-founder, The Chartres
Lodging Group
“Maybe? Not really? While 2025 transactions have
definitely underachieved the optimism that was expressed at the end of 2024,
there appeared to be some undercurrents of momentum building at the end of the
year. But to have a pronounced pickup, uncertainties will need to be
resolved, even with a negative outcome (uncertainty is worse than a certain
negative outlook for transaction activity). For example, New York City
union contract in 2026, tariffs, many other geopolitical issues, etc.”
David McCaslin, co-founder, CapStar Advisors
“M&A will creep back up in 2026, but I don’t
expect a massive change. Many deals are still within their execution
periods and while the environment will be more welcoming it will still be a
selective market, not a rush that pulls everyone along.”