Resort assets remain top target among investors
Over the past five years, resorts have been the darling of the hotel investment community, influenced by consumer focus on experiential travel and an affinity toward lodging assets with an authentic local feel, according to JLL Hotels & Hospitality’s Global Resort Report: Three-Part Series.
Resorts across the world have also benefitted from solid growth in international tourist arrivals, which are anticipated to grow 4 percent in 2019 to 2.2 billion travelers and continue rising at this pace throughout the next decade.
RevPAR performance of resort markets has continued to outpace other locations, such as urban, suburban and airports. The United States observed anemic average supply growth of 0.7 percent from 2014 to first half 2019, which has allowed resorts to achieve an average RevPAR growth nearly two times the national pace of growth. Limited additional supply growth is expected this year and next, which bodes well for resort performance going forward and supports continual investor interest in the asset class. From 2014 to first half 2019, sales activity in resort locations across the Americas accounted for 20 percent of total hotel sales volume, with some of the most notable recent trades including the Waldorf Astoria Boca Raton Resort, the JW Marriott Phoenix Desert Ridge Resort & Spa and the Hyatt Regency Waikiki Resort & Spa. Investor appetite for resorts has spanned coastal resort markets and mid-market destinations, as evidenced by Blackstone Group’s recent announcement that it will acquire a 65 percent controlling interest in family-oriented Great Wolf Resorts. Additionally, Anbang Insurance Group Co.’s sale of 15 luxury urban and resort assets to Korea’s Mirae Asset Management further highlights how hotel investors, foreign and domestic, are gravitating to resort assets in today’s market.
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