Hotel Investments Surge as APAC Tourism Rebounds

Investors Rush to Hotels Amid Tourism Rebound, Boosting Global Markets

Hotel investments are surging, with volumes reaching $5.7 billion in the first half of the year, a 19% increase from the previous year, according to JLL data. This growth coincides with a tourism resurgence, particularly in the Asia-Pacific (APAC) region, where international arrivals are set to hit 741 million this year, surpassing pre-pandemic levels.

The hotel market in Japan has become a standout, capturing over half of all transactions in the APAC region in the second quarter. The weaker yen and attractive debt financing make Japan an appealing target for investors, especially cross-border players seeking positive carry as yields surpass borrowing costs. A notable deal saw American private equity firm KKR purchase a 14-hotel portfolio from Japanese developer Unizo Holdings. Japan’s inbound tourism continues to thrive, with the country recording over three million visitors for three consecutive months this year.

Other APAC markets, including Thailand and China, are also seeing strong investor interest. Thailand welcomed over 17.5 million visitors in the first half of 2024, sparking deals such as the $64 million sale of two luxury resorts. China’s hotel investment growth, on the other hand, is primarily driven by domestic investors, with foreclosure sales boosting transaction volumes in both major and secondary cities.

Looking ahead, JLL projects hotel investment activity in APAC to reach $11.6 billion by the end of 2024. Japan, China, and South Korea are expected to remain top targets for investors, while emerging markets like India, Indonesia, and Thailand are poised for record growth as tourism and hotel performance improve.

India, in particular, has seen renewed interest from investors due to its tourism boom, increased arrivals, and enhanced hotel performance since mid-2023. Meanwhile, Indonesia and Thailand are benefiting from weaker currencies and simplified visa processes, drawing even more attention from investors looking to capitalize on the tourism revival.