Hotel Investment Momentum Builds as U.S. Market Posts $24 Billion in 2025 Transaction Volume

CHICAGO – JLL’s Hotels & Hospitality Group today released its comprehensive 2025 U.S. Hotel Investment Trends Report, revealing that the U.S. hotel investment market demonstrated remarkable resilience in 2025, with transaction volume climbing 17.5% year-over-year to reach $24 billion.

This significant uptick in activity, driven by strong private equity activity and strengthening debt markets, positions the sector for continued momentum as investors capitalize on favorable market conditions and strategic opportunities heading into 2026.

The recovery was particularly pronounced in key growth markets, with New York leading transaction activity at $3.7 billion (29 trades), followed by Phoenix at $1.5 billion (22 trades) and Washington, D.C. at $1.2 billion (22 trades). These markets benefited from several large-scale transactions that drove overall volumes, exemplifying the strategic focus on assets in key urban centers and growth markets where investors are betting on long-term performance.

The data also reveals a fundamental shift in hotel investment patterns, with high-net-worth individuals and foreign capital becoming increasingly active participants, while private equity continued to be active. This diversification of buyer types reflects the market’s recognition of hotels' compelling value proposition, particularly given the historic discount to replacement costs and favorable yield profiles compared to other property sectors.

This momentum is expected to continue into 2026, led by favorable debt markets which have significantly reduced the cost of borrowing. According to Kevin Davis, Americas CEO of JLL Hotels & Hospitality Group, Since September 2024 when the Fed started lowering interest rates, the overall cost of debt has decreased by almost 300 basis points, which has enabled investors to get positive leverage when acquiring an asset, thereby driving increased investment activity. This dynamic fueled transaction activity in the second half of 2025 and will drive increased transaction activity in 2026 and will be the catalyst for transactions in 2026.

2025 hotel operating performance exemplified the K-shaped recovery with RevPAR for luxury properties increasing by 3% over 2024, while RevPAR for midscale and economy segments decreased by 2.8% and 4.4%, respectively. This performance bifurcation reflects changing consumer preferences and spending patterns, with high-income travelers driving continued premium segment outperformance.

Looking ahead to 2026, JLL's analysis indicates substantial opportunities, particularly in World Cup host cities. Based on historical data showing Super Bowl games contribute an average of 2.8 percentage points to annual market RevPAR, World Cup host cities are positioned for even greater impact due to the tournament's extended duration and international appeal. With over 70 games across 39 days, many host cities could experience mid-double digit RevPAR growth in 2026.

The World Cup represents a transformational opportunity for U.S. hotel markets. Combined with America's 250th anniversary celebrations, select cities are positioned for exceptional performance in 2026. Our forward-looking analysis indicates this could be a watershed moment for the hospitality sector. Dan Peek, Americas President of JLL’s Hotels & Hospitality Group

The supply outlook further supports the investment thesis, with new hotel supply growth expected to remain well below the long-term average of 1.7% annually. This constrained supply environment, combined with the 43% urban market share of transaction volume in 2025, demonstrates investors' confidence in existing assets benefiting from limited new competition.

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