Select service hotel transaction volume expected to reach $9.0 billion

CHICAGO, Dec. 3, 2019 – “Enhanced portfolio returns” and “resilient” are two phrases investors used to describe their perspective of U.S. select service hotel properties.

According to JLL Hotels & Hospitality’s U.S. Select Service 2019 Report, which targeted 4,500 investors and/or owners of select service properties in the U.S., more than 70.0 percent of survey respondents expect select service revenue per available room (RevPAR) to remain consistent or increase in 2020. Additionally, 61.0 percent of respondents expect to acquire both select service portfolios and single assets by year-end.

“There is an ongoing evolution of select service product,” says Managing Director Al Calhoun. “Newer select services brands are adapting to the local market, which caters to the consumer trend toward experiential travel. We anticipate continued strong demand for these assets – both single assets and portfolios.”

As of YTD August 2019, select service transaction volume accounted for 37.0 percent of all U.S. hotel transaction volume. JLL projects select service transaction volume to reach approximately $9.0 billion in 2019.

Secondary markets are primary acquisition targets, with 42.0 percent of survey respondents indicating these locations are where their focus lies. Additionally, 33.0 percent of survey respondents noted they were seeking acquisitions in gateway markets. The top five markets for buyers over the next are Los Angeles, San Diego, Atlanta, Boston and Indianapolis.

“Investors are cautious but optimistic,” says Managing Director Mark Fair. “Select service properties’ lower operating costs, paired with growing travel demand is very attractive to investors. Where there are compelling opportunities, there is strong competition.”

Access the full report here.