• Global Hotel Investors Plan to Buy More This Year   

Excerpt from CBRE

CBRE Releases Global Hotel Investor Intentions Survey 2024

Summary

  • Over half of the 300 hotel investors surveyed worldwide by CBRE Hotels Research intend to buy more in 2024 than in 2023, while only 14% expect to buy less.
  • Plans for increased hotel investment across regions are based on expectations of higher returns, price adjustments, distressed opportunities and a lower cost of capital.
  • Nearly 75% of respondents say they are most attracted to opportunistic and value-add hotel assets in 2024.
  • In the U.S., upper-upscale and upscale/upper-midscale are the most popular chain-scale targets in 2024. Canadian investors favor lower- and middle-price tier chain scales, while higher-price tier properties are preferred in Europe, Mexico, Central America and the Caribbean. Upper-upscale properties are the most popular investment chain scale among Asia-Pacific investors.
  • Resorts are the most attractive hotel property type for investors in the U.S., Mexico, Central America and the Caribbean. Central business districts (CBDs) are the most attractive submarkets for European and Canadian investors, while Asia-Pacific and European investors particularly favor those in gateway cities.
  • In the U.S., gateway markets like New York and Washington, D.C. topped the list of cities expected to outperform in 2024, along with leisure-focused markets like Miami, Charleston and Austin. In Europe, investors favor gateway markets like London and Madrid. Among Mexican markets, Los Cabos, Cancun and Mexico City are expected to have the strongest performance in 2024.


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Global Outlook

CBRE Hotels Research is cautiously optimistic about hotel market fundamentals this year, as outlined in our 2024 Global Hotels Outlook report. Following a 33% drop last year, we expect investment activity to pick up in the second half of 2024 due to highly anticipated Federal Reserve interest rate cuts.

Figure 1: Global Hotel Investment Volume & Share of Cross-border Capital 

Source: CBRE Hotels Research, MSCI.

CBRE’s inaugural Global Hotel Investor Intentions Survey of more than 300 investors from the Americas, Europe, Asia-Pacific and the Caribbean casts a positive outlook on global hotel investment in 2024. More than 50% of surveyed hotel investors plan to buy more this year than last, while only 14% expect to buy less. Investors from the U.S., Mexico, Central America and Europe are the most optimistic about increased investment activity.

Figure 2: Investor Intentions for Hotel Acquisition Allocations 

Source: CBRE Global Hotel Investor Intentions Survey 2024.

Cross-border investment is an important source of hotel capital. Approximately 20% of survey respondents invest cross-regionally. We believe the percentage of intra-regional investors, (i.e., U.K. investments in Spanish or French hotels) is considerably higher. Given the positive sentiment among investors, CBRE Hotels Research expects that the cross-border capital share of total global hotel investment will increase in 2024.

Other key findings of the survey include:

  • More than half of Americas region investors said they are mostly targeting hotels affiliated with globally recognized brand families (Marriott, IHG, Hilton, Rosewood, etc.), while the highest percentages of European and Asia-Pacific investors said they are mostly targeting vacant-possession1 hotels. U.S. and European survey respondents showed a preference for hotels affiliated with globally recognized brand families. However, more than half of Asia-Pacific investors said they are more likely to target independent hotels for short-term investment.

1 Either the property is vacant and not operating as a hotel or there is a lease/management in place that terminates upon sale.

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