South Korea has seen a significant rebound in trading performance led by the luxury segment. In July, Singapore-based real estate firm City Developments Ltd acquired Nine Tree Premier Hotel Myeongdong II from South Korea’s Shinhan Asset Management Co. in a 140 billion won ($107.2 million) deal.

Nearly all luxury hotels in APAC have surpassed pre-pandemic revenue per available room (RevPAR) levels during the first nine months of 2023, JLL data shows.

“Since the onset of the pandemic, the luxury segment in both urban and resort destinations has attracted significant interest from domestic and international investors,” says Ercan. “Luxury hotels are increasingly regarded as trophy assets due to their resilient performance and rapid recovery.”

“More institutional investors are also exploring conversion of Tier-1 city rental apartments into hotels, while the swift recovery of hotel performance in tourist destinations like Sanya is also drawing investor attention,” says Ercan.

In the rest of the region, safe-haven markets such as Australia and Singapore remain highly sought-after for investors’ long-term strategies, while India is predicted to emerge as an attractive destination for HNWIs seeking portfolio diversification.

Macroeconomic headwinds continue to be a major bugbear for hotel investors surveyed by JLL, with most flagging inflation as the primary concern, followed by the high costs of capital and rising interest rates.

But 2024 is projected to bring more favourable conditions than challenges in the region.

“Travel momentum is expected to continue, and air connectivity will further recover, providing tailwinds for the industry,” Ercan says.

While APAC hotel investment volumes for this year are projected to fall 14% from 2022, the sector is on track to grow 3% to reach $10.4 billion in 2024, according to JLL.

“Cost pressures are anticipated to ease, and closed-end funds will reach the exit stage of their investment lifespan,” says Ercan.

“This will create new opportunities for growth in non-traditional hotel products such as branded residences, or niche markets like yachts and private jets,” he says.