According to JJL‘s Q1 2025 U.S. Hotel Investment Trends Report, RevPAR hit a first-quarter record high, driven by robust ADR, signaling continued resilience in hotel performance despite economic headwinds. That said, expect a short-term performance impact from a pullback in international tourism.
Other key trends include:
- U.S. hotel liquidity remained resilient with $4.6 billion in Q1 2025 transaction volume, up 23% relative to Q1 2024. However, the lack of portfolios and larger deals, driven by elevated debt costs, has continued to limit volume to below the long-term average, historically.
- Midsized deals, sized $50 million to $199 million, drove total liquidity in Q1 2025 as investors have started to capitalize on the return of corporate groups in urban centers and a 67% discount to replacement cost for full-service, urban hotels.
- Following a surge in inbound foreign investment in Q1, Middle Eastern, European and select Asian groups are likely to be active in 2025, targeting irreplaceable assets in exclusive markets.
- Domestic group and business travel continued to grow YTD. Government-related travel experiencing initial drops and renewed potential for more cautious corporate travel policies.