CHICAGO – Strong debt markets, record dry
powder and reestablished confidence in the sector's resilience are creating
optimal conditions for accelerating investment activity in 2026, according to
JLL Hotels & Hospitality’s annual Global Hotel Investment Outlook.
Several key factors are driving the
positive investment outlook for 2026, according to JLL:
- Robust travel demand: Global
air passenger volumes are projected to grow 4.9% year-over-year, with Asia
Pacific leading at 7.3% growth driven by strong patterns in India, China and
Vietnam.
- Supply constraints create
value: Slower supply growth across major markets will underpin performance of
existing hotels, with most major U.S. cities showing construction pipelines
below 2% of existing supply.
- Improved capital market
conditions: Debt markets have strengthened globally with increased lender
appetite and better pricing, while equity capital remains abundant, supporting
increased transaction activity.
The JLL report identifies several critical
trends for 2026:
- Performance bifurcation drives
conviction areas: More uneven RevPAR performance is creating clear winners and
losers, with investors increasingly focused on quality assets in prime
locations.
- Large-scale transactions
return: Improved debt market conditions enable bigger-ticket sales, with
transactions over $250 million expected to increase significantly.
- Cross-border capital
accelerates: International investment flows are gaining momentum, particularly
into UK and European markets.
- Private equity mobilizes: With
substantial undeployed capital, private equity firms are positioning themselves
to target value-add opportunities, portfolio transactions and high-quality
hotels available below replacement cost across key markets.
“We’re witnessing a fundamental shift in
investor sentiment toward hotels, driven by compelling relative value and the
sector’s proven resilience,” said Kevin Davis, CEO, Americas, JLL Hotels &
Hospitality Group. “The 2026 FIFA Soccer World Cup represents a unique catalyst
for performance in host cities, while constrained supply dynamics create
lasting value for existing assets.”
Will Duffey, CEO, EMEA, JLL Hotels &
Hospitality Group, added, “The era of uniform recovery is decisively over.
We’re now in a phase of strategic sorting, where discerning consumers and
targeted capital are creating a great divergence in the market. Experience-led,
high-quality assets are commanding a significant premium, a trend partly fuelled
by growing global wealth chasing irreplaceable European hotels. This dynamic,
coupled with substantial private equity capital on the offense, is creating
distinct opportunities – from acquiring trophy assets to large-scale, strategic
repositionings. With hotels consolidating a larger share of European real
estate investment and a muted construction pipeline supporting values, a
compelling window has opened for investors to act.”
Asia Pacific presents a mixed but
ultimately promising picture, according to JLL, with Japan standing out as the
regional leader. Goldman Sachs is raising a $500 million fund targeting
Japanese hotels and aiming to close by the end of the first quarter. Japan is
forecasted to represent 35% to 40% of Asia Pacific hotel transaction volumes in
2026, while Singapore's safe-haven appeal and India’s promising growth
trajectory create additional opportunities for strategic capital deployment.
“Asia Pacific’s hospitality investment
narrative is being rewritten by powerful structural tailwinds that position the
region for sustained outperformance,” said Nihat Ercan, CEO, Asia Pacific, JLL
Hotels & Hospitality Group. “With Asia Pacific leading global passenger
traffic growth — driven by expanding middle classes and rising disposable
incomes — we’re seeing Asian capital driving significant market upticks while
the region’s gateway cities rank among the best-performing RevPAR markets
globally. The interconnected nature of Asian markets creates additional
cross-border opportunities, positioning the expected investment volume growth
as just the beginning of a new cycle.”
Looking back, global hotel transaction
volumes in 2025 were up 22% from the 2023 trough. The Americas region led
growth with a 27% increase, while EMEA posted 4% growth. Asia Pacific
experienced a 20% decline, though JLL said resilient travel volumes and
performance fundamentals position the region for a rebound in 2026.
Hotels
also accounted for approximately 8% of global investment volumes in 2025,
surpassing the long-term average, according to JLL.