According to JLL’s U.S. Hotel Investment Market Update, geopolitical uncertainty and private credit concerns have not adversely impacted debt liquidity for hotels.
Revenue per available room improved through March, but the report noted ongoing “bifurcation” with RevPAR at luxury hotels up 7.3 percent while economy hotels were down 2.1 percent. Nationally, RevPAR is holding at $96, up 3.8 percent year to date through March. The report noted that occupancy and average daily rate also have improved year to date.
Transactions
In terms of transactions, the market improved 14.4 percent in Q1 to $5.6B driven by several large luxury-level deals. In total, JLL counted 227 total hotel transactions in the first quarter of the year, up 35 percent year over year.
Analysts credited “stabilizing interest rates and favorable market dynamics” that drove private equity interest in hotels, which ultimately made up 34 percent of transaction volume.
The quarter’s total transaction volume of $5.6 billion was up 14.4 percent from Q1 2025, but down 47 percent since the cyclical peak in 2022. (The report noted that full-service and select-service assets continue to trade at discounts to replacement cost.) Single-asset transaction volume reached $5.4 billion, up 33 percent year over year, and five of those single assets sold for more than $100 million, up 24 percent in volume year over year.
The report noted a slowdown in supply growth, and cautioned that this could “underpin” the performance of existing hotels.
Institutional investors—including private-equity firms, REITs and high-net-worth individuals—are showing renewed interest in the hotel sector, according to the report. This return is driven by the sector's strong yields compared to other commercial real estate classes and a renewed confidence in its resilience.
Looking ahead, large-scale transactions are expected to lead the market, and improved debt market conditions will facilitate a rise in high-value asset and portfolio-level sales.