JLL’s Hotels & Hospitality Group’s latest Global Hotel Investor Sentiment Survey reveals strong optimism for U.S. hotel investment in 2025, driven by recent Federal Reserve rate cuts and robust operating performance in key markets. The survey, which compiled over 8,200 data points from global hotel investors with more than $50 billion in hotel assets under management, highlights several promising trends for the U.S. hotel sector.

“As we head into 2025, we’re seeing a renewed sense of optimism among hotel investors,” said Zach Demuth, global head, hotels research, JLL. “With interest rates stabilizing and hotel operating performance remaining strong, 2025 could mark a turning point for U.S. hotel investment, with urban markets and luxury assets leading the way in attracting both domestic and international capital.”

After three years of slow market conditions driven by economic instability, disruptions in capital markets and increasingly volatile geopolitical tensions, a renewed sense of investor optimism appears to be on the horizon for the global hotel market.

The survey found a record 80% of investors intend to maintain or increase their capital investment in the hotel sector over the coming year—the highest total ever recorded in the survey since it began in 2000.

In recent months, global hotel investment volume has strengthened, with year-to-date Q3 liquidity reaching $40.9 billion, up 10.2% from 2023. This optimism is largely driven by expectations of stabilizing interest rates, with 95% of investors anticipating their all-in cost of capital to remain stable or decrease in the coming year. This follows recent rate cuts by The Federal Reserve (Fed) and aligns with the broad macroeconomic viewpoint that most central banks are at the end of their tightening cycles.

Additionally, the stabilizing financial environment is encouraging a resurgence in cross-border investment, with 57% of investors looking to deploy more capital outside their home regions. North American investors are targeting assets across Europe, citing the strong U.S. Dollar and robust fundamental performance as primary drivers. Meanwhile, Asian investors, are showing increased interest in U.S. markets, focusing on value-add opportunities and potential platform acquisitions.

Urban markets, in particular, are emerging as prime targets for hotel investment in 2025, with 78% of investors planning to deploy the bulk of their hotel investment capital into cities over the next 12 months. For instance, New York City and San Francisco have emerged as top targets for cross-border hotel investors.

San Francisco is attracting attention from Asian, Middle Eastern and some European investors due to its lagging recovery and potential for growth, especially given the surge in tech performance and increasing international travel. On the other hand, cities such as New York City have seen robust performance, attracting Middle Eastern and Asian investors who hope to capitalize on continued growth, particularly in the luxury sector.

As cross-border activity increases, the survey also highlights a notable influx of first-time hotel buyers, who accounted for 27% of investment volume through September. This trend is reshaping the investment landscape, with private equity firms, high-net-worth individuals and family offices leading the charge.

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