Report

Hospitality Real Estate Market Analysis

The Hospitality Real Estate Market was valued at USD 4,910 billion in 2025 and estimated to grow from USD 5,120 billion in 2026 to reach USD 6,270 billion by 2031, at a CAGR of 4.18% during the forecast period (2026-2031). Solid recovery in international arrivals, the return of corporate events, and steady capital inflows into hotel assets underpin this expansion. Inbound investment remains concentrated in Europe and the Middle East, where gateway cities capture significant cross-border capital seeking stable yields. Urban properties lead RevPAR growth because business travel rebounded faster than anticipated, while resorts benefit from the rise of experiential and wellness-driven tourism. Institutional investors are consolidating portfolios through selective acquisitions, adopting AI-driven revenue systems that lift room revenue by up to 10%. Cost inflation and rising construction expenses, however, continue to squeeze margins and temper the growth trajectory of the hospitality real estate market.

Global Hospitality Real Estate Market Trends and Insights



Significant Rebound in Global Tourism and Corporate Travel Activity

Global tourism surpassed pre-pandemic levels in 2024, with 1.4 billion international arrivals and USD 1.6 trillion in receipts, lifting demand across every major lodging segment. Corporate travel spending is recovering in tandem, aided by postponed conferences and an uptick in blended business-leisure trips. China's vast domestic market, together with resurgent outbound travel, is expected to anchor regional performance over the forecast horizon. Extended-stay formats gain traction because longer work trips persist amid flexible office policies, bolstering occupancy in select-service properties. The sustained rebound serves as the single largest volume driver for the hospitality real estate market.

Increase in Cross-Border Hotel Transactions Across Major Gateway Cities

Cross-border deal volume returned swiftly in 2024 as investors pursued stable income streams in globally recognized destinations. The EMEA region drew 74% of inbound capital, led by U.S. funds targeting London, Paris, and Madrid for currency and diversification advantages. Asia-Pacific recovered to 90% of 2019 investment levels, with Japan absorbing roughly half of regional inflows on the back of consistent tourism policy and yield visibility. Full-service hotels dominated 87% of transactions because they deliver multiple revenue sources and flexible asset-management levers. Anticipated interest-rate moderation in 2025 should accelerate deal velocity, lifting the broader hospitality real estate market.

Escalating Operational Costs Impacting Hotel Profitability

Labor expenses, utilities, and food costs are rising faster than room revenue, applying margin pressure across most operating statements. Midscale properties feel the squeeze most acutely because rate elasticity constrains their ability to pass through higher expenses. Operators, therefore, accelerate the deployment of automation, energy-management tools, and lean service models to preserve profitability. Margin erosion stimulates consolidation, as smaller owners lacking scale often choose to divest. Persistent cost escalation thus tempers near-term upside in the hospitality real estate market.

Other drivers and restraints analyzed in the detailed report include:

Strong Performance Metrics Like RevPAR and ADR in Urban and Leisure MarketsRising Investments from REITs, Private Equity, and Institutional InvestorsGrowing Competition from Alternative Lodging Platforms and Short-Term Rentals

For complete list of drivers and restraints, kindly check the Table Of Contents.

Segment Analysis

Hotels dominated the hospitality real estate market, contributing a substantial 68.05% market share. Their dominance is bolstered by globally recognized brands, extensive distribution networks, and a balanced demand mix that mitigates cyclical shocks. Conversion activities, flag upgrades, and AI-driven revenue systems further support steady performance and stable cash flows. In contrast, resorts and spas, while generating a significant share, are projected to grow at a 4.88% CAGR through 2031. A rising preference for health-centric vacations and experiential stays fuels this growth. Operators are capitalizing on this trend, enhancing average daily rates (ADRs) and extending guest stays through wellness amenities, culinary tourism, and curated activities. This strategy not only boosts revenue per available unit but also uplifts the entire hospitality real estate market.

Serviced apartments and boutique inns, as complementary formats, cater to extended-stay professionals and authenticity-seeking tourists, respectively. Their modular designs and compact footprints often yield superior operating margins while addressing the unique needs of travelers. An increasing focus on sustainability and local sourcing amplifies the allure of boutiques for eco-conscious visitors. Consequently, investors find a balanced mix of yield stability and growth potential in the hospitality real estate market by diversifying their portfolios across widely appealing hotels and high-growth resort assets.

The Hospitality Real Estate Market Report is Segmented by Property Type (Hotels, Resorts & Spas, Others), by Type (Chain Hotels, Independent Hotels), by Asset Class (Affordable/Budget, Midscale, Luxury), and by Geography (North America, South America, Europe, Middle East and Africa, Asia-Pacific). The Market Forecasts are Provided in Terms of Value (USD).

Geography Analysis

Asia-Pacific held 38.35% of global revenue in 2025, reflecting its status as the principal growth engine for the hospitality real estate market. Japan alone captured nearly 50% of regional cross-border flows, buoyed by investor trust in its legal framework and inbound visitor momentum. China's domestic tourism, enhanced by large-scale rail and airport expansions, continues to swell occupancy across tier-one and emerging provincial cities. India follows a comparable trajectory as rising middle-class incomes stimulate domestic weekend travel, expanding the audience for branded upper-midscale hotels. Investors target value-add plays that involve rebranding, capex upgrades, and ESG retrofits to unlock yield premiums in these high-growth settings.

The Middle East & Africa are primed for the fastest 6.06% CAGR between 2026 and 2031. Saudi Arabia's Vision 2030 funnels unprecedented public capital into tourism districts. The UAE cements its gateway-hub reputation through large-event calendars that sustain year-round demand and bolster ADRs. RevPAR in the region now stands 28% above 2019, a performance that attracts global operators eager to expand flag footprints. Government-backed finance vehicles and favorable free-zone regulations further reduce entry barriers, encouraging fresh supply and intensifying competition in the hospitality real estate market.

North America and Europe maintain heavyweights' status through their extensive infrastructure, deep talent pools, and diverse leisure and corporate demand generators. London reclaimed the top spot for hotel investment in 2024, while New York and Washington, D.C. show resilient group-booking pipelines driven by trade conventions and pro-tourism policies. European hotel cap rates compressed amid ample liquidity, prompting many investors to pursue refurbishment and ESG upgrades as routes to incremental yield. North American REITs deploy capital toward urban luxury repositioning and destination resorts, aiming for double-digit unlevered IRRs. Together, these mature regions provide stability that balances the high-growth allure of emerging markets, creating a complementary global footprint for participants in the hospitality real estate market.

List of Companies Covered in this Report:

Marriott International Inc. Hilton Worldwide Holdings Inc. InterContinental Hotels Group PLC Accor S.A. Wyndham Hotels & Resorts Inc. Choice Hotels International Inc. Jin Jiang International Holdings Hyatt Hotels Corporation Radisson Hotel Group Best Western International Inc. Sonesta International Hotels G6 Hospitality LLC Aimbridge Hospitality Host Hotels & Resorts, L.P. Apple Hospitality REIT Inc. Melia Hotels International Extended Stay America OTO Development Whitbread PLC NH Hotel Group (Minor Intl.)

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support