In the not-so-distant past, hospitality properties were not a popular choice for investors. The economic downturn caused by COVID-19 resulted in higher vacancies and lower RevPAR growth.
However, things have changed significantly in just a few years. According to CBRE’s 2025 U.S. Hotel Investor Intentions Survey, 94% of participants plan to maintain or increase their hotel investments in 2025.
This is a significant increase from the previous year’s reported percentage of 85%. The survey report attributes this change to an overall more positive outlook on total returns and increased interest in distressed investment opportunities.
What Investors Want
The survey also revealed that value-add and opportunistic hotel investments are currently favored among respondents. However, there has been a decrease in those seeking distressed opportunities despite some citing it as their primary reason for increasing capital allocations towards hotels (25%).
Respondents also shared their reasons for potentially increasing hotel allocations:
24.8% cited an increase in distressed opportunities
19% expressed optimism about potential return prospects
19% noted price adjustments as influencing factors
17.6% mentioned decreasing debt costs
15 % believed hotels will outperform other commercial real estate assets
Where They’re Focusing Their Investments
According to the survey results, resorts and central business district (CBD) hospitality assets are expected to be most attractive among investors next year due to ongoing recovery efforts within international travel markets and improvements within meetings/events industries.
On the other hand, airports and suburban hospitality assets seem less appealing at this time.
Potential Challenges Ahead
Despite overall positivity surrounding future investment plans within the sector, respondents did mention several challenges they anticipate facing including rising labor/capital costs as well as increased insurance expenses.
Additionally , concerns over weakening demand have risen since last year with approximately two-thirds of participants identifying it as an issue moving forward .
