Investors in the Chinese hotel industry could be facing a new era with the recent introduction of real estate investment trusts.
Speaking on the latest episode of the "CoStar News Hotels" podcast, STR's regional vice president in the Asia-Pacific region Jesper Palmqvist said the introduction of hotel REITs in the country could spark a new wave of investment as there's now a new exit path for hotel developers.
"At least in theory, this allows for Chinese owners to recycle capital, and the intention to improve their liquidity," he said. "And I suppose the idea is to potentially then, in a dream world, accelerate the institutional investment in hospitality."
2026 is officially the first year of Chinese hotel REITS, and major players in the country such as Huazhu and Jinjiang have already joined the fray.
Whether those REITs have the intended effect is still to be seen, though.
"I kind of end up with more questions than answers," Palmqvist said. "Like will this increase investment interest in hotel assets? We have to remember that the environment is still muted in reality. I'm keen to find out what kind of segments will get traction."
If anything, this is a reflection of the fact that China's hotel developers have been successful in "building a very large market very quickly in a quarter of the century," Palmqvist said. But now the country's hotel industry is ready to take the next step in its maturation process.
For more from STR's Jesper Palmqvist, listen to the podcast embedded above.