CHICAGO, Illinois—JLL’s Hotels & Hospitality Group released its 2025 U.S. Hotel Investment Trends Report, which found that the U.S. hotel investment market demonstrated remarkable resilience in 2025, with transaction volume climbing 17.5 percent year-over-year to reach $24 billion.
This significant uptick in activity, driven by strong private equity activity and strengthening debt markets, positions the sector for continued momentum as investors capitalize on favorable market conditions and strategic opportunities heading into 2026.
Key Findings
The recovery was particularly pronounced in key growth markets, with New York leading transaction activity at $3.7 billion (29 trades), followed by Phoenix, Arizona, at $1.5 billion (22 trades) and Washington, D.C., at $1.2 billion (22 trades). These markets benefited from several large-scale transactions that drove overall volumes.
The data also revealed a fundamental shift in hotel investment patterns, with high-net-worth individuals and foreign capital becoming increasingly active participants, while private equity continued to be active.
This momentum is expected to continue into 2026, led by favorable debt markets, which have significantly reduced the cost of borrowing. According to Kevin Davis, Americas CEO of JLL Hotels & Hospitality Group, “Since September 2024, when the Fed started lowering interest rates, the overall cost of debt has decreased by almost 300 basis points, which has enabled investors to get positive leverage when acquiring an asset, thereby driving increased investment activity. This dynamic fueled transaction activity in the second half of 2025 and will drive increased transaction activity in 2026, and will be the catalyst for transactions in 2026.”
2025 hotel operating performance exemplified the K-shaped recovery, with RevPAR for luxury properties increasing by 3 percent over 2024, while RevPAR for midscale and economy segments decreased by 2.8 percent and 4.4 percent, respectively. This performance bifurcation reflects changing consumer preferences and spending patterns, with high-income travelers driving continued premium segment outperformance.
2026 Outlook
Looking ahead to 2026, JLL’s analysis indicated substantial opportunities, particularly in World Cup host cities. Based on historical data showing Super Bowl games contribute an average of 2.8 percentage points to annual market RevPAR, World Cup host cities are positioned for even greater impact due to the tournament’s extended duration and international appeal. With over 70 games across 39 days, many host cities could experience mid-double-digit RevPAR growth in 2026.
“The World Cup represents a transformational opportunity for U.S. hotel markets,” said Dan Peek, Americas president of JLL’s Hotels & Hospitality Group. “Combined with America’s 250th anniversary celebrations, select cities are positioned for exceptional performance in 2026. Our forward-looking analysis indicates this could be a watershed moment for the hospitality sector.”
The supply outlook further supported the investment thesis, with new hotel supply growth expected to remain well below the long-term average of 1.7 percent annually. This constrained supply environment, combined with the 43 percent urban market share of transaction volume in 2025, demonstrated investors’ confidence in existing assets benefiting from limited new competition.
