MANCHESTER, England — Navigating risk in today’s hotel transactions market is more fraught than ever, with inflation, policy headwinds and higher costs of capital reshaping how investors view the market.
Cody Bradshaw, group CEO of hotels at London & Regional Group, said during a session at the recent Annual Hotel Conference that “now is the time to be really patient and reserved.”
In a conversation with Laura Brinkmann, managing director and founder at Effizia Strategic Partners, Bradshaw struck a cautious tone but not fully a pessimistic one. He said 2026 appears to mirror a lot of the sentiment, caution and giddiness seen as the world emerged from the COVID-19 pandemic in 2021.
“Actually, fast-forward five years, and unfortunately [the lessons and learning of COVID-19 are] still relevant for today. We’ve got really unprecedented, systemic risk across the globe, with inflated, record equity markets, record concentration risk in those equity markets, government debt, interconnected nature of all these tech companies … including the AI race and the CapEx investment being made, and so now is the time to be really disciplined,” he said.
He added now is the time to “get back to roll-up-your-sleeves work, which a lot of the younger generations isn’t used to.”
One message Bradshaw sends to his team, many of which are early in their careers, is knowing how to turn down a deal because of the guide price.
In 2026, Bradshaw brought together L&R’s previous four pillars: hotels, ventures, private credit and commercial real estate. He also merged its two hotel divisions — L&R Hotels and Iconic Luxury Hotels — into one platform now known as Iconic Hotels & Resorts. That new division furthers the company from being a pure hotel real-estate owner to being an owner-operator with greater geographical reach, he said.
According to its website, L&R has a real-estate investment portfolio valued at £10 billion ($13.4 billion), including 115 hotels.
In 2025, London & Regional Group engineered a joint venture with Midstar AB to launch LR Midstar Holdings with an initial capital injection of €600 million ($688 million) to target hotel acquisition in the Nordics.
Valuations and hotel deals
The gap between hotels with value and those without value is widening, Bradshaw said.
“That process started with Marriott acquiring Starwood,” he said, referencing the 2016 mega-deal that celebrates its 10th anniversary this year. “I even heard in a meeting the other day that one debt fund said they would lend at a lower interest rate if flagged with a Marriott brand, as they have seen it themselves.”
Brinkmann reminded Bradshaw that in 2021 he said, “now is not the time to play hero.”
Bradshaw replied that 2026 is a time of multiple opportunities but that discipline and knowing when to say no require greater acuity.
“One of the best trades you could have done in the last 12 months was buying into the U.S. lodging real estate investment trusts, which there are about 16. They were really struggling post-Liberation Day, trading at like a 10% cap rate. About a year ago they were all up about 50%.”
The hospitality nature provides plenty of opportunities to pivot strategy and react to what other types of hotel investors are doing, Bradshaw said.
“What's going to happen with all these ground leases that owners put on their hotels in the last cycle, that pensions funds now looking to get out?” he asked.
Ultimately, he said the compelling nature of the hotel industry is that it is an endless flow of different situations.
If pressure is to come, it might well be from the clamor for AI and tech evolution.
“The circular nature of the refinancing that is happening right now, which is completely unregulated. I think the regulators are looking the other way for political reasons because of this AI race between the U.S. and China. … This is something we have never seen before,” Bradshaw said, adding any correction could be ugly.
Hotel firms must analyze their exposure to certain source markets so they don't caught in potentially strong headwinds, he said. On the bright side, 50% of U.S. citizens now have passports, and there is an increased spend on travel from the baby boomer population, he added.
That was then, this is now
The hotel deals market provides plenty of opportunities but also plenty of traps, Bradshaw said.
“The best deals that you will do in your career are the ones you didn’t do … coming in second place ends up being a real winner in the process. Put your deal blinders on,” he said. “The main cause of bad judgement in deals is actually yourself and your emotions and ego. There is a long list of reasons people stretch for deals when they probably shouldn’t. Maybe it is the size of the deal? Private equity always is enamored by the size of the deal.
“Maybe it is a trophy asset? Maybe it is because they will get a bonus at the end of the year for doing a big deal.”
Sometimes the best view of the hospitality deals market is from the sidelines, Bradshaw said.
He added hoteliers should “really try to just hang around the [transaction market] to see how it plays out. A lot of the processes are coming out with very high guide prices that are not reflective of today’s values. They are yesterday’s pricing.”
In 2013, when Bradshaw's former employer Starwood Capital completed the Principal Hailey deal, the landscape was full of hotel deals that many considered unfinanceable following the Great Recession.
“There were warnings of double- or triple-dip recessions. What advantage we had is that we had information no one else did, that bookings across corporate and leisure were actually up for the next three to six months,” he said.
That might be harder in today’s transparent data universe.
Bradshaw added that AI is a very valuable resource, one that can bring cohesion to hotel operations. At the moment, however, that is not happening in most companies.
“It certainly levels the playing field,” he said. “I am feeling now quite old in my career. I remember the days when we said the internet and www.com were going to level the playing field with the brands, and then came the online travel agencies, and now AI.”