US hotel transactions up 17.5% last year

NATIONAL REPORT — Market liquidity turned the corner for U.S. hotel investment in 2025 with transactions up 17.5% year-over-year to $24 billion, demonstrating market resilience, according to JLL’s U.S. Hotel Investment Market Update.

According to the report, debt markets have significantly improved, with borrowing costs dropping nearly 300 basis points since the Fed began cutting rates in September 2024. The top markets that led the hotel investment recovery were New York City ($3.7 billion, 29 trades), Phoenix ($1.5 billion, 22 trades), Washington D.C. ($1.2 billion, 22 trades), Miami ($1.1 billion, 18 trades) and San Francisco $831 million, 10 trades).

Total transaction volume of $24 billion, while still below the recent high of $42.6 million in 2022, picked up significantly in the third and fourth quarters of the year.

Private equity led acquisition activity in 2025 and accounted for 34% of all activity. Buyer diversification increased as participation from high-net-worth individuals and foreign capital increased. Acquisitions last year had an urban focus, with 43% of transaction volume concentrated in urban markets.

While RevPAR growth was slightly down in 2025, the World Cup and America 250 are expected to help boost performance in the top markets in 2026 as host cities are expected to see mid-double-digit RevPAR growth from 70 games across 39 days this summer.

Among the top U.S. markets, San Francisco saw the biggest RevPAR recovery, up 11.8% YOY, followed by St. Louis at 9.4%, Hawaii at 6%, New York City at 4.5% and Orlando at 3.9%.

The study also said that U.S. hotel supply in the years ahead will remain below historic averages, underpinning the performance of existing hotels, as new supply is projected at 0.8%, well below the long-term average of 1.7%. 

The study found that banks and the CMBS market remain the dominant debt capital sources for hotel borrowers in the U.S. JLL said $88 billion in hotel loans are expected to mature through 2027, which should facilitate more transactions in the coming years, especially for owners facing cost and capex pressures.