Chicago, January 30, 2026 — The U.S. hotel investment market 2025 demonstrated strong resilience and renewed momentum, with transaction volume rising 17.5% year-on-year to $24 billion, according to JLL’s newly released 2025 U.S. Hotel Investment Trends Report. Strengthening private equity participation and improving debt liquidity were key drivers behind the rebound, positioning the sector for continued growth in 2026.
JLL noted that the U.S. hotel investment market 2025 benefited from improved financing conditions and investor confidence, particularly in the second half of the year. Lower borrowing costs and positive leverage opportunities encouraged capital deployment across high-quality assets and strategic markets.
Transaction activity was strongest in major growth hubs. New York led the market with $3.7 billion across 29 trades, followed by Phoenix at $1.5 billion (22 trades) and Washington, D.C. at $1.2 billion (22 trades). Several large-scale transactions in these cities significantly boosted overall volumes, reflecting investors’ long-term confidence in urban and high-growth destinations.
The report also highlights a notable shift in buyer composition within the U.S. hotel investment market 2025, with high-net-worth individuals and foreign capital becoming increasingly active alongside private equity firms. This diversification reflects hotels’ compelling value proposition, particularly given their historic discount to replacement cost and attractive yield profiles relative to other commercial property sectors.
Improving debt market conditions are expected to sustain investment momentum into 2026. Kevin Davis, Americas CEO of JLL Hotels & Hospitality Group, said falling interest rates have been a critical catalyst.
“Since September 2024, when the Fed started lowering interest rates, the overall cost of debt has decreased by almost 300 basis points,” Davis said. “This has enabled investors to achieve positive leverage, driving transaction activity in late 2025 and setting the stage for increased investment in 2026.”
Operating performance in 2025 reflected a K-shaped recovery. Revenue per available room (RevPAR) for luxury hotels rose 3% year-on-year, while midscale and economy segments declined by 2.8% and 4.4%, respectively. This divergence underscores continued strength in premium travel demand, driven by higher-income consumers.
Looking ahead, JLL’s outlook for 2026 is particularly optimistic for World Cup host cities. Drawing on historical data showing Super Bowl events lift annual market RevPAR by an average of 2.8 percentage points, JLL expects the extended duration and international appeal of the FIFA World Cup—featuring more than 70 matches across 39 days—to drive mid-double-digit RevPAR growth in select markets.
“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, certain cities are positioned for exceptional performance in 2026.”
The investment thesis is further supported by constrained supply growth. New hotel supply is projected to remain well below the long-term average of 1.7% per year, while urban markets accounted for 43% of total transaction volume in 2025, highlighting investor confidence in existing assets benefiting from limited new competition.
Overall, the U.S. hotel investment market 2025 closed the year on a strong footing, with fundamentals, financing conditions and major global events aligning to support sustained momentum into 2026.
