Dive Brief:
- Global hotel investment will accelerate in 2024, exceeding investment in 2023 by between 15% and 25%, according to JLL Hotels & Hospitality Group’s 2024 Global Hotel Investment Outlook, released last week.
- Urban markets, in particular, will attract investor interest thanks to their significant recovery in 2023. And the evolution of proliferating hotel brands, as well as the rise of sustainable travel, will create additional investment opportunities.
- The growth in hotel investment reflects consumers’ continued prioritization of travel spending, a trend that signals positive outcomes for the global hotel industry.
Dive Insight:
Urban markets — which were the slowest to recover post-pandemic — saw significant recovery in 2023, with RevPAR surpassing 2019 levels by 12%, according to JLL. In 2024, these markets will lead global hotel investment, particularly major hubs that attract international tourists, like New York, London and Tokyo.
Hotel brands have also evolved. Not only did several major hotel companies launch (sometimes multiple) brands in 2023 — think IHG Hotels & Resorts’ Garner, Marriott’s StudioRes and Hilton’s LivSmart Studios — but existing brands are tapping into consumerism by selling retail products online, creating new revenue streams and building customer loyalty. Hotels are also branching into nontraditional areas, with offerings like members’ clubs and yachting excursions.
As global hotel development slows, JLL projects that brand acquisitions and consolidation will become increasingly appealing.
Meanwhile, global hotel investors will also seek opportunities in sustainable hotels and regenerative tourism, in line with growing consumer willingness to pay more for eco-friendly lodging options. A rise in green financing options has also given investors new sources of capital in “an otherwise turbulent capital market environment,” according to JLL.
Private equity is still the leading buyer of worldwide hotel assets, JLL said. However, more new investors are entering the industry, with a “record-breaking” 19% of global hotel investment volume stemming from first-time hotel buyers in 2023.
All the while, JLL notes, investor interest in luxury properties, plus select-service and extended stay hotels, will remain strong this year.
JLL’s latest forecast follows the organization’s previous reports of growing global hotel investment. In August of last year, JLL noted that the return of international travel was causing an uptick in foreign hotel investment.
