Investors are showing renewed interest in luxury and upper-upscale hotels in major cities around the world.
After a resilient 2024—marked by 4.8 billion global room nights and a 4% rise in RevPAR—the hotel market has continued to grow, albeit with varying performance across regions.
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Regional differences shape investment choices
Europe and the Americas have largely returned to pre-pandemic levels, while Asia-Pacific is still catching up. China’s travel market is slowly rebounding, offering significant growth potential for hotels in the region.
Analysts forecast global RevPAR growth of 3–5% in 2025, supported by leisure travel, corporate bookings, and international group demand.
These trends are encouraging investors to focus on cities such as London, New York, and Tokyo, where premium and lifestyle hotels are in high demand.
Urban hotels attract renewed investment
City hotels, especially in the luxury segment, are drawing attention from both institutional investors and private equity.
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By GlobalDataGlobal hotel investment is expected to rise by 15–25% in 2025, driven by factors such as upcoming loan maturities, deferred capital expenditure, and fund-life expirations.
Investors are particularly focused on assets that can offer stable returns in high-demand urban locations.
Opportunities in a recovering market
The evolving hotel market presents opportunities for both new investors and established operators. International travel, corporate events, and group bookings are driving performance in major cities, and careful management of assets can enhance returns.
Analysts emphasise that results will remain uneven across regions, highlighting the need for informed, data-driven strategies when entering these markets.
As 2025 nears its end, luxury and lifestyle hotels in major cities are set to remain a priority for investors seeking growth, stability, and long-term opportunities in the global hotel sector.
