Hotel investments set to surge 15-25% in 2025, per JLL

The global hotel market is primed for a significant rebound in 2025, with JLL’s Hotels & Hospitality group forecasting a 15 to 25 percent increase in transaction volumes after a pandemic-driven downturn, reports Skift. Global hotel investment reached $57.4 billion in 2024, 17 percent below the historical average, but improving urban market conditions and falling interest rates are expected to reignite investor confidence.

Key cities such as London, New York City, and Tokyo are predicted to benefit most, as institutional capital shifts back to city-center hotels. However, high construction costs in major urban areas will favor acquisitions and conversions over new builds. Resort markets, which boomed during the pandemic, are projected to cool as demand normalizes.

The hotel industry is also experiencing a shift in development strategies. New construction supply growth is slowing to just 2 percent, well below historical averages, while extended-stay and select-service properties in non-resort areas are emerging as low-risk bets.

Emerging markets, including India and Saudi Arabia, are drawing significant investment as they target ambitious tourism growth. Additionally, JLL foresees increased M&A activity among major hotel brands as they seek partnerships and portfolio acquisitions to expand.

JLL analysts note hoteliers will need to navigate evolving travel patterns, the rise of flexible-use properties, and global economic uncertainties.