Asia Pacific Hotel Investment Volumes Surge 54% in Historic First Half Performance

SINGAPORE – Asia Pacific hotel investment market produced is strongest first half performance in seven years against a backdrop of global headwinds, economic volatility and cautious buyer sentiment. According to data and analysis by JLL (NYSE: JLL), the hotel market demonstrated remarkable resilience in the first half of 2026, with transaction volumes reaching $6.8 billion representing a 54% increase from H1 2025.

Hotel investment sentiments continue to defy expectations and demonstrate the draw of Asia Pacific hospitality assets. Solid market fundamentals combined with robust deal activity across the region have worked in tandem with investors that are increasingly demanding greater certainty and more thorough due diligence before deploying capital.

Nihat Ercan, CEO, JLL Hotels & Hospitality Group, Asia Pacific

According to JLL, regional performance is diverse with three markets primarily driving the surge in investment activity during H1 2026.

Japan led the region with $1.9 billion in transactions, representing 75% year-over-year growth. Activity featured three significant portfolio transactions: AB Capital's acquisition of the JPN Kanagawa Hotel Portfolio, Tosei's purchase of the JPN Pelican Hotel Portfolio, and KKR & PAG's buyout of Sapporo Real Estate.

Mainland China recorded $1.5 billion in volume, marking an impressive 224% year-over-year increase. The secondary market activity dominated Q2, with auction sales expanding the transaction pool by introducing distressed and undervalued properties. The disposal of nine assets by R&F Group exemplified this trend.

Australia achieved $901 million in transactions, surging 38% year-over-year. Growth in Australia investment was fueled by private investors, family offices, and owner-operators competing for mid-market metropolitan and regional assets, while private equity and funds focused on CBD and trophy properties.

In parallel, developers emerged as the most active buyer group in the first half of 2026, representing 22% of total volume, followed by fund managers at 19% and high-net-worth individuals and family offices contributing 5%. Domestic capital remained the dominant force in regional hotel acquisitions, though cross-border investors were particularly active in Japan, Australia & New Zealand, and Korea, with fund managers leading cross-border activity.

JLL also observed a distinctive capital markets trend over the time period with investors targeting underperforming hotels for repositioning into living assets. Hong Kong led this movement, with four hotels transacting for a total of $340 million in H1 2026, primarily earmarked for student housing or co-living properties. Singapore's market reflected this trend through Coliwoo's $79 million acquisition of the Park Avenue Changi hotel for co-living conversion.

This emerging pattern underscores a broader capital markets shift, with hotels increasingly viewed as opportunistic and value-add entry points into the region's living sector. However, these conversions remain asset-specific, targeting aging and underperforming properties rather than reflecting any weakness in the region's underlying hotel fundamentals, which remain robust.

The combination of robust trading performance, strong capital deployment across diverse investor types, and emerging opportunities in hotel repositioning positions the Asia Pacific hotel investment market for continued growth throughout the remainder of 2026. With stronger-than-expected momentum registered in H1 2026, Asia Pacific is on track to achieve overall annual hotel investment volume growth of 15-20% from 2025 levels.

Julien Nauori, Head of Investment Sales, Asia, JLL Hotels & Hospitality Group

Hotel trading performance between January and May 2026 validated investor confidence, with RevPAR in USD jumping more than 6% on average across APAC despite geopolitical tensions in the Middle East. Growth proved strongest in Australia & Oceania and Southeast Asia, driven by significant ADR increases.

Vietnam led country-specific performance with double digit RevPAR growth, followed by South Korea, New Zealand, and India. These results demonstrated the sector's fundamental strength and resilience in navigating external challenges.

In terms of international tourist arrivals, Asia and the Pacific recorded 3% year-over-year growth in Q1 2026, with Oceania advancing 9% and North-East Asia gaining 5%. While overall arrivals remained 11% below pre-pandemic levels (89% of Q1 2019), resilient tourist arrivals and steady RevPAR growth continued supporting the investment case for hotel assets across the region.

JLL’s estimated 15-20% full year growth outlook reflects continued buyer interest supported by solid hotel fundamentals, despite a more measured approach to deal execution as investors maintain heightened due diligence standards in response to global economic uncertainties.

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