After enduring a dramatic shock to performance, the global lodging industry is eager to move forward.
The deals that did cross the finish line were well underway prior to the pandemic, with nearly 50% of all transaction closings taking place during the first three months of the year. Other hotels that traded involved the conversion of a hotel to an alternative use or the participation of a motivated seller willing to come down on pricing to strike a deal.
Private equity groups and institutional investors drove liquidity in the market and accounted for 54% of total volume for the year. These investors responded to shifts in hotel demand and leisure traveler preferences by adjusting their investment strategies to acquire assets in less dense markets and resorts. In fact, assets located in resort markets represented 21% of global hotel investment activity, two times the proportion observed in 2019.
1. Private equity groups and high-net-worth individuals (HNWI) anticipated to be active purchasers of hotel assets in 2021.
2. Hotel parent brand companies supporting the evolution of traditional management agreements via “Manchises”.
3. Changing consumer preferences and Airbnb IPO underscore need for hotel room redesign and advancements in technology.
4. Pressure is mounting to prioritize investing in real estate grounded in ESG principles at the global stage.