JLL forecasts a continued disconnect between accelerating hotel fundamental performance and macroeconomic headwinds, according to its Hotels & Hospitality Group’s latest Global Hotels Investment Outlook.
The past year has been rather remarkable.
Despite global economic volatility, labor shortages, and supply chain disruptions, the global lodging industry was largely boosted by leisure demand and notable international tourism events in 2022,” according to the report.
Consumers are driving hotel performance despite economic bumpiness, placing heightened importance on travel and experiences, which has accelerated lodging demand, and resulted in RevPAR reaching or exceeding 2019 levels in some markets, JLL said.
Global hotel occupancy reached 89% recovery relative to 2019 levels and demand is showing no sign of slowing. Global hotel ADR exceeded global inflation by 70 basis points in 2022.
“Hotel owners can likely push rates even further in some markets with the goal of increasing profitability,” according to the report.
Strong Single-Asset Activity
Global portfolio transactions declined slightly last year but all three regions benefitted from strong single-asset activity, specifically within the luxury and select-service sectors, JLL said.
The select-service sector accounted for 34% of single-asset global investment volume, its highest proportion ever, with the Americas and EMEA seeing notable growth.
Plenty are taking notice: First-time buyers account for 16% of global hotel investment volume in 2022.
Private equity continues to be the largest acquirer of hotel assets globally underpinned by massive amounts of dry powder on hand.