88% of Asia Pacific Investors Are Looking at Hotels. Here Is Why.

Not long ago, hotels were considered a specialist investment. Something for hospitality groups, large funds, or the occasional high-net-worth individual with a passion for the industry. Most property investors stayed focused on what they knew: apartments, commercial buildings, and land.

That picture looks very different today.

According to JLL’s Hotel Investment Highlights Asia Pacific survey, 88% of investors across the region are now actively looking at hotels as an investment. In 2021, that figure was 70%.

The shift has been rapid, broad, and increasingly difficult to ignore.

So what changed? Why have hotels moved from a niche investment into one of the region’s most closely watched asset classes? The answer is not one thing, but several trends converging at the same time.

For most investors, the starting point is simple: where can capital generate the strongest return?

Over the past three years, that equation has shifted sharply in favour of hotels.

Residential property in Asia’s gateway cities has delivered shrinking yields. Gross yields on apartments in Hong Kong now sit around 2 to 2.8%. Singapore’s residential market delivers roughly 2.5 to 3.5%, while a 60% stamp duty for foreign buyers has made the investment equation significantly harder.

Meanwhile, well-managed hotels in Asia’s high-demand tourism markets are generating gross yields of 8 to 15%. That is not a marginal difference. It is a fundamentally different income profile.

Chad Egan, CEO of Geonet, noted “For a long time, residential property was the default investment across Asia. What’s changed is that investors are now comparing that against real operating income, and the difference is becoming very difficult to ignore.”

At a certain point, investors stop treating hospitality as an alternative asset and start treating it as the better-performing one.

For several years running, industrial and logistics property was the dominant asset class across Asia Pacific. The rise of e-commerce, fulfilment centres, and last-mile delivery infrastructure created enormous institutional demand for warehousing and logistics assets across markets like Singapore, Japan, Australia, and South Korea.

In the second quarter of 2025, hospitality assets represented 13% of all real estate transactions made by high-net-worth individuals across Asia Pacific, according to JLL. That placed hotels ahead of industrial and logistics assets for the first time. The people with the most capital, and the most options, chose hotels over the previous market darling.

Given how dominant logistics had been for much of the previous decade, the shift stood out.

This is now showing up not just in sentiment, but in transaction activity, investor allocations, and the growing number of institutional groups increasing exposure to hospitality across the region.

Investment returns ultimately depend on demand, and the demand story for Asia Pacific hotels has become increasingly compelling.

Asia is producing affluent households faster than any other region in the world, growing at approximately 8% annually through to 2030. Those households travel frequently, travel regionally, and increasingly prioritise experience-led hospitality.

The new Asian traveller is not simply looking for a clean room at a reasonable price. They are looking for hotels with strong design, memorable food and beverage, wellness integration, and experiences worth sharing.

JLL’s research on lifestyle hotels across Asia Pacific found that properties built around a strong identity and food and beverage offering command average daily rates roughly 10 to 11% above the broader market. Food and beverage revenue per occupied room also runs approximately 30% higher than traditional hotels.

As Egan explains, “The best-performing hotels today are not competing on price alone. They are competing on experience, identity, and how people feel when they stay there. That changes the economics of the asset completely.”

More than 57% of hotel operators across Asia Pacific are optimistic about revenue growth in 2026, with lifestyle brands showing the strongest sentiment of any segment.

The operators closest to the market remain confident about where demand is heading.

One of the longstanding objections to hotel investment was volatility. Hotels are exposed to travel demand, and for years the assumption was that travel demand could disappear quickly during periods of economic or geopolitical disruption.

The past three years have challenged that view.

In 2024, Asia Pacific hotel markets delivered their strongest trading performance since before the pandemic, with average daily rates rising across nearly every major market and transaction volumes reaching record levels.

In 2025, international arrivals across the region grew by 6%, while RevPAR continued climbing, up 2.7% through August, led by markets such as Vietnam, Japan, and India.

The momentum carried into 2026. In the first two months of the year, RevPAR across Asia Pacific surged 11%, despite geopolitical disruptions that reduced long-haul arrivals from Europe and the Middle East.

An important part of that resilience has come from the diversification of Asian travel demand itself. Hotels drawing more heavily from regional markets such as Australia, India, South Korea, and Japan generally held occupancy levels far more consistently.

Bali has been a clear example of that trend. Despite broader geopolitical disruptions affecting some long-haul markets, Q1 2026 international arrivals totalled 1,466,566, slightly ahead of last year, which was already a record period for tourism on the island.

“What we’re seeing in Bali is that regional travel demand has become incredibly resilient,” says Egan. “Even when parts of the global market soften, travellers from Australia and across Asia continue coming back because Bali has become part of their regular travel pattern.”

For many investors, this has changed how hotel risk is being viewed. Resilience, once considered one of hospitality’s weaknesses, is increasingly becoming part of the investment case.

Individual investors rarely lead markets. More often, they follow the direction of larger institutional capital. Across Asia Pacific, some of the region’s biggest investors have been increasing exposure to hotels at a noticeable pace.

International investment into Asia Pacific real estate reached USD 16.3 billion in Q1 2026 alone, an all-time quarterly high and an 87% increase year on year. Hotel transactions across the region are forecast to reach USD 13.3 billion for the full year.

The names behind those transactions are significant. Blackstone has been acquiring resort hotels in India. Brookfield continues deploying capital across Japanese hospitality assets. Private equity groups across the region are actively pursuing hotel opportunities with target returns in the mid to high teens.

The profile of investors entering the sector is also evolving. High-net-worth individuals and family offices are becoming a larger share of hotel buyers globally, attracted by the combination of cash flow, stronger yields, and the long-term appeal of owning hospitality assets tied to tourism growth.

These are typically patient investors with long investment horizons. When this kind of capital starts moving consistently into a sector, the broader market usually follows.

For investors who have traditionally focused on residential property, hotels are increasingly becoming difficult to ignore. Not because they are fashionable, but because the underlying fundamentals have shifted: stronger operating income, rising regional travel demand, and growing institutional participation across the sector.

The question for most investors is less about whether hospitality deserves attention, and more about what kind of hotel investment, in what kind of market, makes sense over the long term.

The patterns emerging across Asia Pacific tend to point in a similar direction: destinations with diverse tourism demand, lifestyle-oriented assets with experienced operators, and markets where entry prices still sit at a reasonable level relative to the income being generated.

Those conditions still exist across parts of Asia Pacific today. The reason more investors are paying attention is that they may not remain overlooked forever.

Geonet specialises in hotel and property investment across Asia Pacific, with particular focus on Bali’s lifestyle hospitality market. To learn more about current investment opportunities, speak with our team.