US hotel investment climbed to $24B in 2025: JLL

Core Insights - Hotel investment in 2025 saw a significant increase, with transaction volume rising 17.5% year over year to reach $24 billion, driven by strong private equity activity and improving debt markets [1][3] Investment Trends - Major cities leading transaction activity included New York City at $3.7 billion, Phoenix at $1.5 billion, and Washington, D.C. at $1.2 billion, indicating a strategic focus on key urban centers and growth markets [2] - The report highlighted an increase in foreign capital and high-net-worth individuals entering the hotel investment space, attracted by the compelling value proposition of hotels compared to other property sectors [3] Market Dynamics - The Federal Reserve's actions, particularly the reduction of borrowing costs by almost 300 basis points since September 2024, have positively influenced hotel investment activity, enabling investors to achieve positive leverage [3] - The Fed's interest rate cut in December could further encourage new investments, with potential additional rate cuts spurring more deals [4] Performance Segmentation - The hospitality industry experienced wealth bifurcation, with luxury properties seeing a RevPAR increase of 3% year over year, while midscale and economy segments faced declines of 2.8% and 4.4%, respectively [5] Future Opportunities - Upcoming events in 2026, such as the FIFA World Cup and the 250th anniversary of America, are expected to create substantial opportunities for hotels, with host cities potentially experiencing mid-double-digit RevPAR growth due to the tournament's extended duration and international appeal [6]