JLL Hotel Investment Outlook - 2015: Year of upward momentum

• Global hotel deal volume rose 10% to nearly $60 billion in 2014.
• Single-asset transactions notched $40 billion – the highest annual result ever.
• Hotel transaction volumes could reach $68 billion in 2015 – a 15% increase.
• All indications point to the current cycle continuing at peak volumes for several more years.
• Cross-border trades to account for one-third of deals in 2015, with the U.S., China, Singapore and the Middle East the biggest capital exporters.
• The question of fair value is resounding through the sector.

A rising tide lifts all boats, and the strong flow of cross-border capital into hotel real estate assets is galvanising increased deal momentum. We forecast global hotel real estate transaction volume to reach $68 billion in 2015. This represents a 15% increase on 2014 levels and the third-highest annual total on record. Our projection comes on the heels of a robust 2014, when global hotel transaction volume reached nearly $60 billion, a 10% increase over the year before. Private equity investors are fully loaded and under pressure to invest funds. Asian money, driven by outbound Chinese capital, is growing rapidly due in part to increased activity from insurance companies. The confidence that investors and lenders have in global hotel market performance is expected to remain strong in 2015, with the year representing the highest transaction volume in eight years, as investors are ready to chase after top hotel deals.

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