2024 marked a significant rebound in global hotel investment, driven by strong growth in cross-border transactions.

'The U.S. remains a buyers' market but should see net asset value growth through the end of the decade. EMEA is benefitting from more international tourism, making it an attractive destination, particularly for luxury and resort hotels. Asia-Pacific continues to be a powerhouse of growth, creating investment opportunities in value-add strategies. Potential risks include geopolitical factors affecting travel, currency fluctuations, and inflationary pressures across the globe.' - Rachael Rothman (CFA, ISHC), Head of Hotels Research & Data Analytics

This report was compiled before the emergence of recent geopolitical and trade challenges, most notably U.S. tariffs and stock market volatility, in early April 2025. With the situation evolving on a daily basis, it is too early to gauge the effect it may have on global hotel capital flows in the year ahead.

Americas

EMEA emerged as the dominant source of cross-border capital in the Americas in 2024, accounting for 74% of inbound investment volumes. However, this was partly due to Asia-Pacific investors, particularly those from Greater China, reducing their activity. Full-service hotels remained popular, comprising 87% of all cross-border investment last year. Upper upscale properties accounted for 49% of investment volumes in 2024, an increase of 13 percentage points since the onset of the COVID-19 pandemic. Hotel investment in the Americas is expected to strengthen this year on the back of narrowing bid-ask spread and lower interest rates.

EMEA

In EMEA, foreign capital inflows accounted for 61% of total hotel investment volumes, driven by interest from U.S.-based investors. The UK remained the top destination, while Italy, Portugal, and Greece, showed substantial growth in cross-border investment. Looking ahead to 2025, stabilized interest rates, solid operating performance, and the projected medium-term demand/supply dynamics are expected to sustain investment momentum.

Asia-Pacific

Total hotel investment volumes reached 90% of 2019 levels last year, outpacing EMEA (75%) and the Americas (60%), driven by strong purchasing by investors from within the region. The U.S. remained the leading source of cross-border capital, with annual inflows up 23% since the onset of COVID-19. Japan saw a significant rise in capital inflows in 2024, comprising nearly 50% of cross-border investment in the region. Investor sentiment is expected to remain strong in 2025, driven by prospects of lower interest rates, occupancy growth, and limited supply. Cross-border capital should remain focused on Japan, driven by lower debt costs and a weak Yen, as well as Australia, Southeast Asia, and Korea. A notable shift toward upscale and upper midscale products involving value-add strategies is expected.

Global Hotel Capital Investment Flows

Highlights

• Global cross-border hotel investment grew 54% year-over-year in 2024, boosting total hotel transaction volumes by 16% year-over-year.

• Driven by strong interest in European markets, investment in EMEA outperformed other regions, with cross-border and total volumes increasing 112% year-over-year and 65% year-over-year, respectively.

• Global cross-border hotel investment as a percentage of total transaction volume exceeded pre-pandemic levels in 2024. This is unlike other commercial real estate asset classes, where cross-border investment has yet to fully recover. Strong cross-border investment over the past decade has resulted in a ~US$50 billion increase in foreign investors’ hotel ownership and the significant expansion of hotel brands worldwide.

• Asia-Pacific has emerged as a bright spot since COVID-19, logging a 12% increase in annual capital inflows during 2020-2024, driven by steady purchasing by U.S. investors. At the same time, reduced outbound investment from Greater China has led to declines of 52% and 70% in annual capital inflows into EMEA and the Americas, respectively, compared with the 2014-2019 period.

• Over the last five years, Japan and Italy have been the only destinations among the top ten most popular markets to register increases in annual inbound hotel investment compared to the 2014-2019 period, up 67% and 15%, respectively. In terms of outbound investment, investors from Greater China have significantly reduced their purchasing activity, with annual average outflows decreasing by 83% since COVID-19.

• The global hotel investment outlook for 2025 is positive, both in terms of domestic and cross-border investment. Across all three regions, CBRE expects lower interest rates, a positive travel and tourism outlook, and favorable demand/supply fundamentals to drive more capital flows into the hotel sector.

Outlook

After rebounding strongly last year, hotel investment volumes in Asia-Pacific should remain strong in 2025. The outlook is buoyed by the prospect of further rate cuts in many markets (excluding Japan) in 2025, further occupancy growth and a limited supply pipeline.

Cross-border capital will remain highly focused on Japan. Despite potential for further interest rate hikes, the overall cost of debt for hotels in Japan remains much lower than other markets in the region. With the Japanese yen continuing to experience weakness, the strong U.S dollar will spur interest from U.S. based investors.

Cross-border investors will continue to be interested in Australia and Southeast Asia. Korea should attract more capital given its strong fundamentals, with full-year 2024 ADR rising 48% from 2019 levels. This has resulted in the completion of several landmark transactions over the past 24 months.

Following a period of significant interest in luxury and upper upscale assets, investor demand in Asia-Pacific is expected to shift toward more upscale and upper midscale product. Value-add strategies should be the predominant play for hotel investors, with buyers increasingly looking to unlock asset value through rebranding or redevelopment. Limited-service assets will gain popularity through this redevelopment lens, with investors looking to convert unbranded assets into international branded hotels to drive ADR and improve operating cost efficiency.

Read the full report here