Global Report Shares Hotel Investment Insights – Hotel Magazine

While the world navigates the aftermath of Covid, it is clear that consumers are more money conscientious than before. JLL Hotels & Hospitality Group revealed in its latest Global Hotels Investment Outlook that the industry should anticipate investors deploying capital to take a share of the traveller’s experience.

Two of three global regions saw an increase in hotel investment in 2022 – the Americas and APAC. Reaching 71.9 billion dollars, the investment rates only showed a two percent decline to 2021.

Global portfolio transactions declined slightly, but all three regions benefitted from single-asset activity – mainly in the luxury and select-service sectors. At its highest proportion, the select-service sector accounted for 34 percent of single-asset global investment volume.

2022 saw an increase in new investors entering the private equity sector. First-home buyers generated 16 percent of the investment volume.

Going into 2023, investors should keep the following in mind:

• A continued disconnect between accelerating fundamental hotel performance and macroeconomic headwinds.

Even with labour shortages and supply chain disruptions, leisure demand and international tourism boosted the global lodging industry in 2022. Global hotel occupancy reached an 89 percent recovery compared to 2019, and the global hotel ADR exceeded inflation by 70 basis points in 2022. As the demand shows no signs of slowing, hotel owners can push rates to increase profitability. 

• Re-emergence of international travel and opportunities for cross-border hotel investment.

During the first three-quarters of 2022, around 700 million tourists travelled – a 133 percent increase from the same period in 2021.

• Redefining hospitality with a renewed focus on owning the entire travel experience.

Focusing on the work-life balance and authentic travel experiences are leading new lodging demand segments. Travellers are looking for new places to see, creating opportunities for investors and hotel brands to expand.

While rising costs will be a concern, the systemic and societal changes caused by the pandemic have created opportunities for hotel investors. The long-awaited reopening of China will boost further industry growth, and investors will likely get involved. This year, acquiring quality assets and growing one’s portfolio will be on many hotel investors’ minds.