Dive Brief:
- Luxury hotel deals are set to see a surge in investment activity due to strong fundamentals and strengthening capital markets, according to JLL’s latest U.S. Hotel Investment Market Update shared with Hotel Dive.
- Ultra-luxury hotels, in particular, have shown “exceptional” resilience, with RevPAR reaching 148% of pre-pandemic levels year-to-date through April, surpassing broader luxury (133%) and overall U.S. market recovery (120%), per the June report. In a set of 47 ultra-luxury properties with ADRs of more than $1,000, RevPAR reached $872 through April 2026, demonstrating “sustained demand from high-net-worth travelers.”
- Overall, the report found that luxury hotels present a “compelling opportunity for investment” due to a myriad of supporting factors, including strong operational performance and limited supply growth, per JLL. Earlier this month, speakers at NYU’s annual International Hospitality Investment Forum also expressed their conviction in the luxury market amid a growing wealth bifurcation.
Dive Insight:
The report also finds that capital markets have also aligned, with private equity contributing to more deals and representing nearly 30% of luxury transactions since 2015. Real estate investment trusts and institutional investors have also stepped up their participation at 24.8% and 11.1%, respectively.
Moreover, demand for luxury hotels and resorts remains robust as global wealth creation — which grew at a 9.6% compound annual growth rate from 2015 to 2025 — outpaces ultra-luxury supply growth, which expanded by 2.3% CAGR during the same period.
“Luxury consumer spending patterns are outpacing overall economic growth and fueling interest in luxury travel and experiences,” the report notes.
This gap also presents a “compelling opportunity” for investing in the ultra-luxury sector, partially due to supply constraints in the sector, per JLL. Higher construction costs and high entry barriers in prime locations have also caused ultra-luxury hotels to grow at a “more tepid pace” than demand, furthering ripening investment opportunities.
The report also found that ultra luxury grew nearly twice as fast as the broader luxury sector since the pandemic, furthering demonstrating the segment’s resilience.
Additionally, the investment market has appeared to reach an inflection point, meaning it is gearing up for its next “active trading cycle,” with activity surging 115% year over year in the first quarter of 2026, per JLL.
Notable deals in Q1 included the Four Seasons Resort Orlando at Walt Disney World Resort in Florida and the Four Seasons Resort and Residences Jackson Hole in Wyoming, which sold for a combined $1.1 billion. Miami-based Gencom also acquired the Ritz-Carlton New York, Central Park for $320 million, per JLL.
The report notes that luxury hotel transactions historically occur in high-velocity periods of 18 to 36 months, and the window for luxury transactions is opening soon.
“Based on a surge in activity in late 2025, 2026 is expected to mark the beginning of the next active trading cycle for these premium assets,” the report notes.
Earlier this year, JLL said global hotel investment trades are expected to see a “robust increase” this year, with luxury continuing to lead the pack. The same report also predicted that private equity would be back on the offense.
