Hospitality Investing News - Southwest April 2024

The Latest in the Southwest Hospitality Market

Investors and lenders are forming a clearer and more accurate view of the hotel landscape after external forces clouded the picture in recent years, likely encouraging capital that has been building up to re-enter the market. Buyers that have been awaiting steep discounts and distress, which has not materialized on a large scale and is unlikely to in 2024, may shift expectations and target performing assets. Rising PIP costs, exacerbated in some cases by owners that tapped into these funds during the pandemic shock, could create opportunities this year. Greater financial markets consistency, the potential for interest rate cuts and increased confidence in a soft landing should help alleviate hotel investment headwinds. Nevertheless, the sharp rise in borrowing costs has challenged deal-making. Limited-service hotels comprised almost two-thirds of nationwide hotel trades last year amid stronger performance trends and higher yields. Returning international and business travel could stoke greater luxury and upper upscale trading in 2024.