The year turned out to be a more difficult year for hotel deals than originally expected back in January, but it wasn't impossible.
Big or small, an individual deal or a whole portfolio, buyers and sellers were able to agree on terms despite the economic uncertainty, geopolitical tensions and wavering hotel demand.
Below are selections of CoStar News Hotels' coverage of U.S. hotel transaction environment in 2025.
Kicking off the year, in a podcast interview, Peachtree Group Managing Principal and CEO Greg Friedman said that due to the options available, borrowers would have an easier time accessing capital for their deals and projects.
"If you're wanting and you're willing to move forward with projects, I think you're going to be able to find the capital in 2025," he said. "If you're able to be somewhat creative, I think you're probably going to find a much more accretive structure."
Hotel investors speaking at the 2025 Americas Lodging Investment Summit said they hoped the year would prove to have a more active transaction market now that the Federal Reserve was cutting rates and the presidential election was in the past. During one executive panel, Stephen Zsigray, president and CEO of Ashford Hospitality Trust, said a major hurdle that remained was pricing expectations between buyers and sellers, but more aggressive property improvement plan requirements and debt maturities could push more owners to sell.
"I think we'll see that bid-ask spread come in quite a bit here in 2025 and find a point in the middle that makes sense," Zsigray said.
Hyatt Hotels Corp. announced in early February its plan to buy Playa Hotels & Resorts for $2.6 billion and then sell off the owned real estate with a target of $2 billion in sales. The acquisition closed June 17, and Hyatt worked out a deal to sell a portfolio of 15 all-inclusive resorts to Tortuga Resorts, a joint venture of KSL Capital Partners and Rodina, for $2 billion.
“The planned real estate sale to Tortuga transforms the acquisition of Playa Hotels & Resorts into a fully asset-light transaction and increases Hyatt’s fee-based earnings,” Hyatt President and CEO Mark Hoplamazian said in a news release. “Hyatt has secured long-term, durable management agreements and the planned real estate sale demonstrates Hyatt’s commitment to its asset-light business model and ability to deliver value to shareholders that is accretive in the first full year.”
Executives at hotel real estate investment trust Park Hotels & Resorts announced in their full-year 2024 earnings call they intended to sell between $300 million and $400 million in non-core assets this year while investing up to $330 million into the remaining portfolio. In December, the company shared it had sold, entered into agreements or had letters of intent to sell five non-core hotels for approximately $198 million. By the end of the year, it expected to sell another three non-core hotels with expiring ground leases.
In an interview with CoStar News Hotels, Trinity Investments President and CEO Sean Hehir said he expected a good year for deals, adding the company had a "robust acquisition pipeline."
On top of regular deals, Hehir said Trinity had the opportunity to be a source of rescue capital for other owners.
“I think we would like to be a friendly source of rescue capital for that segment, in addition to our regular day job of buying, fixing, repositioning hotels,” he said.
In March, Trinity and Axonic Capital took ownership of the 1,249-key Hilton Atlanta with a $191 million credit bid at a foreclosure auction.
On the disposition side, Trinity sold in May for $865 million the 950-key JW Marriott Phoenix Desert Ridge Resort & Spa and its accompanying golf courses. It bought the property in 2019 from Blackstone for $602 million and invested $100 million into the resort.
Months later, in September, Trinity and its partner Certares Real Estate Management sold the 352-key lifestyle hotel EAST Miami to Blackstone Real Estate. CoStar data shows the property sold for $300 million.
Investment firm Gencom grew its presence in New Orleans in March by purchasing the Ritz-Carlton, New Orleans and the Courtyard by Marriott New Orleans French Quarter Iberville. CoStar data shows the deal price as $195 million.
By mid-year, it was clear to the hotel investment community that their earlier transaction predictions weren't playing out as they thought. Dan Peek, president of JLL Americas Hotels & Hospitality, said people weren't sure where to place their bets, and while some were still trying, others stayed on the sidelines.
“So, we're in another price discovery phase,” he said. “Are we going to have interest rate relief? Is that [lower] consumer and corporate confidence going to find its way into performance and result in lower performance and, as a result, lower pricing?”
At the 2025 NYU International Hospitality Investment Forum, finance and hotel executives said that while the first half of the year was challenging, the second half still held opportunities.
In a video interview during the conference, Kevin Davis, Americas CEO of JLL Hotels & Hospitality, had similar sentiments, saying there was potential for deals activity to pick up as the macroeconomic factors at play settle down.
"I think what's going on is there's a bit of a resetting and reframing as to how investors are thinking about the market," he said. "As we get into probably late third quarter, fourth quarter, we can start to see some resolution, and people start to just transact and again, supported by the sales market, supported by a strong debt market."
Smaller deals, those at the $50 million or below level, were making up a significant portion of the deals volume.
That said, buyers were still making the big deals. Blackstone Real Estate-associated funds bought the 785-key Sunseeker Resort Charlotte Harbor, now the Sunseeker Resort Florida Gulf Coast, Curio Collection by Hilton, and the accompanying Aileron Golf Club from Allegiant Travel Co., for $200 million.
In late August, hotel REIT Braemar Hotels & Resorts announced plans to sell its entire portfolio of luxury hotels and set a termination fee with its external advisor, Ashford Inc., at $480 million.
Months later, hotel REIT Ashford Hospitality Trust, which also has Ashford Inc. as its external advisor, shared it was also considering strategic alternatives, including a possible sale.
“However, we remain frustrated by the discrepancy between the value of our underlying portfolio and the market value of our common stock, and the board has tasked the special committee with proactively exploring alternatives to bridge that gap," President and CEO Stephen Zsigray said in a statement.
A fund managed by Magna Hospitality sold in October four hotels for $489.8 million to a group of undisclosed "large institutional owners" along with a separate Magna fund that will maintain partial ownership.
A joint venture of Kemmons Wilson Hospitality Partners and Ascendant Capital Partners announced in late October it would acquire hotel REIT Sotherly Hotels in an all-cash offer to buy the outstanding shares of the common stock for $2.25, a 152.7% premium over the REIT's closing share price on its last trading day before the announcement. At the time, Sotherly had a market cap of $18.24 million.
At the Lodging Conference, hotel executives addressed the growing pressure on the transaction market, pointing to the factors at play pushing owners to sell.
“It does depend on the catalysts — the narrowing of the bid-ask spread, what does a refinancing look like? Are you going to have to put capital back into it? Those are catalysts pushing people toward a sale,” said said Kate Henriksen, co-chief investment officer RLJ Lodging Trust.. “And the longer deals fester or hotels fester out there, there is more pressure to transact.”
Noble Investment Group capped off a busy year by buying a portfolio of 35 extended-stay hotels from Service Properties Trust.
In an interview, Noble Senior Vice President of Investments Dustin Fisher said the Simply Suites portfolio deal "bolts into that strategy as a good way to add to that platform and scale. That’s really key when we’re trying to grow a platform that gets to a durable cash-flow yield where we can add operating alpha and generally get into good markets that have this depth of extended-stay generators.”
Hotel owners received a gift at the end of the year with the Federal Reserve lowering interest rates for the third time in 2025. The Federal Open Market Committee decreased the federal funds rate by 25 basis points in September, October and December.
“The combination of this lower interest rate and the compression of the bid-ask spread could signal that brokers will finally be correct with their annual announcements that ‘next year, transaction volume will be better,’” said Jan Freitag, national director of hospitality analytics at CoStar.