The hotel industry has historically been considered a riskier asset class due to seasonality and short-term rental models. However, changes in consumer behavior following the COVID-19 pandemic have shined a light on their long-term potential and ability to maintain value. According to Deloitte’s 2025 Commercial Real Estate Outlook, “hotel assets have risen significantly in investor interest, now ranking fifth among the asset classes expected to present the greatest opportunity for real estate investors over the next 12 to 18 months.” Unlike office or retail spaces, hotels are incredibly adaptive to economic and societal shifts.
For Instance:
- Hotels generate dynamic revenue streams. From daily room rates to special packages, F&B services and events, the profit channels go far beyond typical commercial buildings reliant on static leases.
- Hotels support urban and suburban revitalization efforts. Their economic impact fosters community growth, from creating jobs to boosting tourism and related businesses.
- Hotels naturally diversify risk. “By including hotel assets in their portfolios, investors can spread risk more effectively across multiple real estate sectors,” explains this article. With robust management and the ability to adapt to changing demands, they stand as a hedge against external uncertainties.
- Many hotels, especially boutique and luxury brands, have been a solution for mixed-use developments, pairing their accommodations with retail spaces or cultural attractions.
This adaptability allows hotels to remain relevant and profitable in fluctuating markets, and investors are well aware of the benefits. “JLL’s annual Hotel Investor Sentiment Survey found a record 80% of investors intend to maintain or increase their capital investment in the hotel sector over the coming year,” states this article.
The DeSoto Hotel in Savannah, GA
The DeSoto Hotel in the heart of historic Savannah is a shining example of a hotel’s ability to maintain its value. Known for its Southern charm and unmatched luxury, the DeSoto has been an integral part of the city since its opening in the 1800s. Featuring modern amenities, farm-to-table dining and locally inspired design, it continues to attract both leisure and business travelers.
Calloway Title was pivotal in facilitating a smooth transaction for the DeSoto’s ownership transfer. Ensuring clean title work and error-free closings is key to securing investments like these, and we’re proud to support deals that elevate hospitality standards.
2025 Outlook for Hotel Investments
The future of hotel investments looks particularly bright as we approach 2025. According to a recent survey by JLL, optimism in the hotel sector is at an all-time high. With Federal Reserve rate cuts, stabilizing capital costs and robust performance in key urban markets, investors are actively seeking hotel opportunities.
Emerging Trends:
- Growth in Urban Markets: “78% of investors plan to deploy the bulk of their hotel investment capital into cities over the next year,” according to this article. Cities like New York, San Francisco and Savannah are experiencing heightened interest from domestic and international investors.
- Cross-Border Investments: Global investors are targeting U.S. hotel properties due to the strength of the dollar and promising performance metrics.
- Increasing First-Time Buyers: The hotel sector is attracting new players, including private equity firms and high-net-worth individuals.
Work with Calloway Title
Investing in hotels has its challenges, but working with the right title partner can make all the difference in streamlining transactions and mitigating risks.
We have experience in handling title work for large-scale hospitality ventures. Our portfolio includes The DeSoto Hotel, The St. Regis Hotel Atlanta, Mandarin Oriental, Sea Island, GA, Hilton Garden Inn Orlando at SeaWorld and more. Visit www.titlelaw.com to work with Calloway Title on your next commercial deal.