Private Equity, Family Offices Step Up Hotel Investment Activity
Hotel investment in Asia Pacific slowed in the first half of 2025 as macroeconomic uncertainty and pricing gaps tempered dealmaking, but private equity and wealthy individuals are emerging as increasingly active players, according to JLL.
Total transactions reached $4.7 billion in the six months through June, down 23% from a year earlier. Investors concentrated their firepower in the region’s most established markets, with 84% of volume confined to five countries: Japan led with $1.5 billion, followed by Greater China ($744 million), Australia ($664 million), Singapore ($546 million) and South Korea ($504 million). All other markets combined attracted $758 million.
The slowdown underscores a more cautious stance from institutional investors, said Nihat Ercan, CEO of JLL Hotels & Hospitality Group Asia Pacific. “Coming off a high base last year, the moderation we’re seeing reflects a realignment of capital sources in the hotel investment landscape,” he said.
Tighter bid-ask spreads are also at play. Sellers have largely held firm on pricing expectations, while buyers are applying greater scrutiny and stretching due diligence timelines, JLL noted.
Even so, private capital has been moving in. Private equity allocations to hotels rose 6% year-over-year in the first half, while high-net-worth individuals boosted their hotel spending by 54%, lured by diversification benefits and tourism-led growth.
“Although institutional investors remain selective, private capital is moving decisively to secure prime hospitality assets that offer both defensive income characteristics and growth potential,” Ercan said, adding that activity should pick up in the second half as delayed deals clear.
Underlying operating fundamentals are helping sustain confidence. International arrivals in Asia Pacific climbed 12% in the first quarter, lifting revenue per available room across key markets. Tokyo hotels reported occupancy above 80% with room rates higher than pre-pandemic levels, while Singapore and Sydney also maintained strong ADRs above 2019 benchmarks.
JLL forecasts Asia Pacific hotel investment to reach $12.8 billion for the full year, about 5% above 2024. Japan, Australia, Greater China, Singapore and South Korea are expected to remain the most liquid markets, while Vietnam and Malaysia could benefit from rising tourism inflows.
“The final six months of 2025 present compelling entry points for strategic investors,” Ercan said. “We expect private equity funds, family offices and regional operators with access to private capital to be among the most active buyers, targeting assets where operational expertise can unlock value.”
