NEW YORK — Recent hospitality investment activity has led some real estate investors to believe even more deals are on the horizon in 2026, despite macroeconomic challenges and ongoing geopolitical uncertainty.  

Following a rebound in deal volume toward the end of 2025, panelists at this year’s NYU International Hospitality Investment Forum in New York City agreed on one thing: hotel investment is on track for growth in 2026, buoyed by a favorable debt market, secular tailwinds and increasing foreign investment. 

During a conference session titled “Capital Talks: Signals Behind the Shift in Hospitality Investment,” hospitality real estate investors also discussed how historic discounts to replacement costs are driving transactions and speculated on what else is driving investment. 

Continued positivity

According to Michael Bluhm, managing director and global head of real estate, gaming, lodging and leisure at investment bank Jefferies, “there definitely is a momentum shift around capital willingness to take on risk” as well as growing confidence among consumers.

He said during the June 1 panel that this is evidenced by Tilman Fertitta’s bid to buy Caesars Entertainment for $17.6 billion, which includes taking on about $11.9 billion in debt. 

"That's definitely not something that could have gotten done two years ago,” Bluhm said. “But today, you have 10 banks supporting this with a pretty deep capital structure.” 

Additionally, Bluhm forecasts that the K-shaped economy will continue to direct investment activity, with deals strategically taking place in higher-tier segments due to “a growth trajectory and a growth algorithm that's better than the industry as a whole.” 

As a result of luxury segment gaining steam, Jeff Stulmaker, partner and chief investment officer at KHP Capital Partners, said the firm is eyeing investments that are “a notch up” to align with travelers’ tastes. 

He pointed to KHP’s recent opening of the 1 Hotel Seattle, an example of a luxury lifestyle hotel, which offers experiences that tap into what travelers want today. 

“It's [luxury lifestyle] hotels that speak to who [travelers] are, who they aspire to be, and what we've noticed is at that level, the biggest constraint is time, not money,” Stulmaker said. “So they're going to pay whatever they want for the experience they want — not for two-thirds of the experience they want.”

Meanwhile, Emily Feeney, vice president of capital markets and transactions at Noble Investment Group, noted that Noble is pursuing a different strategy. In late April, the Atlanta-based firm closed on a 10-property portfolio of upscale select-service and extended stay hotels. 

Feeney added that although investment activity picked back up toward the end of 2025, things changed during the first quarter of 2026, with several challenges dampening investment. These included Winter Storm Fern, which impacted hotel performance; airport disruptions due to a partial government shutdown; and the war in Iran that began in late February, which all contributed to “a lot of noise in the macro environment.” 

Still, Feeney says Noble feels positive about the rest of this year, given that the U.S. is forecast to see year-over-year RevPAR growth of 2.8% for full-year 2026. 

“We think that transaction volume is going to pick up because of the proven month-over-month, week-over-week positivity and performance, and the resilience of the customer,” she said. 

Historic discount to replacement cost  

Feeney noted Noble looks forward to closing on other "exceptional opportunities” such as the 10-property April deal, adding the firm is less focused on timing and cycles, and more on the right opportunity. 

Its latest 10-property portfolio acquisition was purchased at around 25% to 30% below replacement cost, Feeney said. The seller was going through some structural changes, and Noble saw this as a chance to expand with high-quality brands across 10 different markets. 

Stulmaker said the historic discount to replacement cost is also driving deals at KHP. 

“When you have that opportunity to buy, and in our case, really high quality assets when those lower cost capital providers aren’t really in the market … that’s really compelling for our LP [limited partners] base,” Stulmaker said. 

Other positive drivers  

Foreign investment into the U.S. hospitality market is also trending high, with investment coming in from Europe, Japan and Singapore, Bluhm noted. 

According to Bluhm, the U.S. remains the fastest growing part of the world, where the consumer has an insatiable appetite for travel, and specifically experiences. 

“There are secular trends in our industry that are tailwinds, and we are seeing them continue to grow,” Feeney echoed. “We are seeing it’s the movement of people.” 

Some of these tailwinds include an increasing desire for workforce mobility, an aging population that prefers experiences over “fine things” and the upcoming benefits from a massive transfer of generational wealth in the next six to eight years, Feeney said.  

Additionally, a favorable debt market will bolster investment activity going forward, Bluhm noted.  

“Public debt markets couldn’t be stronger, and CMBS markets are having a second or third record year,” he said. 

Although the macro environment is “incredibly noisy,” banks are still looking to grow and remain competitive, Feeney said, particularly in portfolio deals that have strong, increased debt yields. 

What the future holds

Bluhm applauded Hyatt offloading 14 properties to Tortuga Resorts, which involved a hotel selling its real estate to a financial sponsor. 

“I think the advisor did a fantastic, incredible job to get that transaction done,” he said about the Hyatt deal. “I think that's a very difficult transaction to replicate, particularly in Mexico real estate.” 

Speaking to whether the industry will see more deals like this, Bluhm said he isn’t certain the Hyatt deal will become a model for future transactions. He noted the deal stands as an anomaly in the investment market since future investors likely won’t pursue such models due to their risk. 

“I think, as a general matter, strategists have not been willing to take that kind of asset ownership risk,” he said. “The biggest names have been very careful. Their investors are very keenly focused on the algorithm of their model that they don’t want to change.”

Bluhm also predicts the market will see “slightly less single-asset portfolio transactions” as well as a rebirth in the recapitalization market due to the strength found in secondary markets. 

“It’s not regret … I think thematically [recapitalization] is going to be one of the big things,” he said. “This time next year, you’ll be talking a lot about the recapitalization that’s being driven by the secondary [market].”