Capital is returning to hotels. But not to all hotels.
That is the real story.
After years of uncertainty, high interest rates, cautious lenders, and reduced transaction volumes, the international hotel investment market is showing signs of reactivation. But this new phase does not resemble the broad expansionary cycles of the past. It will not reward every lodging asset indiscriminately. It will not finance poorly documented transactions. And it will no longer accept business plans built on weak assumptions.
Capital is returning where value can be clearly understood.
This analysis draws on an article published by Hotel Dive, written by Noor Adatia, covering the main trends that emerged at the NYU International Hospitality Investment Forum, one of the most relevant gatherings for international hotel real estate.
During the panel “Capital Talks: Signals Behind the Shift in Hospitality Investment,” several industry players pointed to an improved outlook for hotel investment in 2026. The key themes were clear: greater availability of debt, stronger focus on luxury lifestyle, continued interest in select-service and extended stay, acquisitions below replacement cost, renewed foreign capital, and the possible return of recapitalizations.
For the Italian hotel market, these signals matter. Many hotels have location, history, and potential, but are not yet ready to engage with funds, banks, investors, or international operators. The issue is not always the absence of value. More often, it is the inability to make that value demonstrable.
The Investimenti Alberghieri blog explores these topics in depth, focusing on the relationship between hotels, capital, debt, valuations, extraordinary transactions, and hotel asset transformation.
Risk appetite is returning
One of the most significant contributions came from Michael Bluhm, managing director and global head of real estate, gaming, lodging, and leisure at Jefferies.
Bluhm pointed to a shift in the way capital is looking at risk. Compared with two years ago, the market appears more willing to support complex transactions. One example discussed was Tilman Fertitta’s offer to acquire Caesars Entertainment, a transaction that also involves assuming a significant amount of debt.
The signal is not only the size of the deal. It is the willingness of banks to support deeper and more complex financing structures.
When the credit system starts moving again, the hotel market regains oxygen. But debt does not return equally for everyone.
Banks and investors now want credible sponsors, reliable data, sustainable cash flows, solid markets, measurable risk, realistic business plans, and plausible exit strategies.
For Italian hotels, this is a decisive point. It is not enough to say that a property has potential. That potential must be demonstrated through numbers, governance, documentation, contracts, positioning, and management control.
A hotel may be attractive from a real estate perspective, yet not financeable. It may have a strong location, yet not be bankable. It may generate revenue, yet remain unreadable to an investor.
In this new cycle, the difference will not be between beautiful hotels and unattractive hotels. It will be between understandable assets and opaque assets.
The K-shaped economy: not all hotels will grow alike
Bluhm also referred to the concept of a K-shaped economy, a phase in which some segments grow while others decline.
Applied to hospitality, this is a useful lens.
Investors are not returning to the hotel sector uniformly. They are selecting markets, segments, brands, operating models, and risk profiles.
Upscale, luxury, lifestyle, evolved select-service, and extended-stay assets will continue to attract attention. By contrast, hotels with weak positioning, outdated products, poor management, or unclear numbers may remain excluded from the recovery cycle.
Growth will be selective.
In Italy, this polarization could be even more pronounced. The Italian hotel market includes many independent properties, often located in strong destinations, but not always equipped with the managerial model, reporting, management control, and strategy expected by professional capital.
Two hotels in the same city may have very different outcomes. One may become attractive to investors and operators. The other may remain illiquid, even if it appears to be in a similar location.
Capital does not buy location alone. It buys the asset’s ability to convert that location into sustainable income.
Luxury lifestyle: when experience becomes real estate value
Another central contribution came from Jeff Stulmaker, partner and chief investment officer at KHP Capital Partners.
Stulmaker explained that KHP is looking “one notch higher,” in line with changing traveler preferences. The reference is to the luxury lifestyle segment, where a hotel is no longer merely a place to sleep but a platform for experience.
The example mentioned was the recent opening of 1 Hotel Seattle, positioned as a luxury lifestyle product capable of capturing more sophisticated demand.
The most interesting point concerns the behavior of high-spending guests. In this segment, the constraint is not only price. It is time. Guests with high spending power do not want a partial experience or a generic offer. They want exactly what they are looking for, and they are willing to pay for it.
This dynamic also changes how hotels are valued.
A hotel is not worth only its room count, historical revenue, or theoretical real estate value. It is also worth its ability to turn space, service, design, food and beverage, wellness, relationships, and destination into a desirable and monetizable proposition.
In luxury lifestyle, value is not only in the bricks. It is in the asset’s ability to generate experience, identity, and margin.
For further insights into the relationship between hotel assets, management, contracts, valuation, and value creation, see the hotel guides by Roberto Necci, dedicated to investment, business distress, asset management, governance, management control, and hotel transactions.
Select-service and extended stay: value is not only in luxury
The panel did not point in only one direction. Alongside luxury lifestyle, there is still strong interest in more operational, scalable, and financially disciplined segments.
Emily Feeney, vice president of capital markets and transactions at Noble Investment Group, described the company’s strategy following its recent acquisition of a portfolio of 10 upscale select-service and extended-stay hotels.
This is an important point. The market is not looking only for iconic resorts, luxury hotels, or lifestyle brands. It is also looking for properties capable of producing stable cash flows, with efficient operating models, recognized brands, controlled costs, and diversified demand.
Extended stay, in particular, captures important structural trends: workforce mobility, longer stays, flexible corporate demand, temporary housing needs, less traditional business travel, and demand for functional yet high-quality accommodation.
Feeney noted that the first quarter of 2026 was affected by several external factors: weather events such as Winter Storm Fern, also cited by CoStar for its impact on hotel performance; airport disruptions related to a partial government shutdown; and geopolitical tensions, including the conflict in Iran that began in late February.
Despite these challenges, Noble Investment Group maintains a positive outlook for the remainder of the year, also supported by expectations for RevPAR growth in the United States.
The message is clear: investors do not ignore risk. They accept it when the asset has solid fundamentals.
The most important theme: buying below replacement cost
One of the most relevant concepts to emerge from the discussion is the discount to replacement cost.
In the case of the portfolio acquired by Noble Investment Group, Emily Feeney indicated a purchase price approximately 25-30% below what it would cost today to rebuild similar assets.
This is a crucial point for the Italian market as well.
At a time when building new hotels is increasingly expensive, slow, and complex, acquiring existing assets below replacement cost can be a powerful strategic lever.
This does not mean that every existing hotel is a good investment. It means that certain assets may embed an advantage that is difficult to replicate.
In Italy, this logic is even stronger because hotel development is constrained by urban planning restrictions, long authorization processes, limited availability of convertible properties, rising construction costs, complex changes of use, architectural and landscape protections, increasing energy and plant engineering costs, technical and regulatory upgrades, fragmented ownership, and the difficulty of creating new supply in mature locations.
For this reason, an existing hotel in a strong location may be more compelling to acquire, renovate, and reposition than to develop from scratch.
The right question is not only:
“What is this hotel worth today?”
The more strategic question is:
“What would it cost today to create a similar asset, in the same location, with the same market potential?”
That difference is often where the opportunity begins.
The discount is not enough: execution matters
Buying below replacement cost does not automatically make an investment attractive.
An asset may be acquired at a discount and still become problematic if it requires excessive capital expenditure, if the market does not absorb the repositioning, if the debt is too expensive, if management is weak, or if the governance of the transaction is unclear.
Real value is created when the initial discount is translated into a credible industrial plan.
This requires an integrated strategy covering acquisition price, renovation cost, authorization timelines, operating model, commercial positioning, brand or affiliation, debt structure, operating risk, expected return, and exit value.
In a mature hotel market, the investment is not won only at acquisition. It is won through execution.
KHP Capital Partners: asset quality and reduced competition
KHP Capital Partners, through Jeff Stulmaker, also connected the discount-to-replacement-cost theme to the opportunity to acquire quality assets at a time when some low-cost capital providers are less active in the market.
This observation matters because it points to another shift: the reduced presence of less disciplined capital can create opportunities for more structured investors.
When the market is too liquid, good assets become expensive and competition compresses returns. When capital becomes more selective, those with expertise, vision, and execution capability can find better opportunities.
In Italy, this scenario may apply to family-owned hotels facing generational transition, under-managed assets, properties with conversion potential, hotels requiring repositioning, portfolios in need of reorganization, transactions involving debt restructuring, and hotels in strong locations with weak operating models.
The Investhotel blog explores investment, acquisition, value enhancement, and transformation strategies for hotel assets, with a particular focus on the relationship between capital, real estate, management, and development.
Foreign capital: Europe, Japan, and Singapore are looking at hospitality
Another point raised by Michael Bluhm concerns the growing international interest in the U.S. hospitality market, with capital coming from Europe, Japan, and Singapore.
This confirms that hospitality is again perceived as an attractive asset class, particularly in markets with structural demand, liquidity, financial depth, and clear exit potential.
The United States retains characteristics that are difficult to replicate: scale, transparency, specialized operators, a mature debt market, and deep financial instruments.
However, the same logic may also apply to Italy, especially in destinations with stable international demand: Rome, Milan, Venice, Florence, Naples, the Amalfi Coast, Lake Como, Sardinia, Puglia, Sicily, and other highly recognizable leisure destinations.
The problem is often not the absence of investor interest. It is the quality of the investable offering.
A hotel may be located in an extraordinary destination but still not be ready for an institutional investor. It may have location, history, and potential, yet lack reliable numbers, clear contracts, a capex plan, technical due diligence, an orderly corporate structure, or a sustainable management model.
International capital does not buy beauty alone. It buys clarity.
Debt, banks, and CMBS: finance is back in the game
The debt market was one of the central themes of the panel.
According to Michael Bluhm, public debt markets and CMBS are highly active. Emily Feeney added that, despite a complex macroeconomic environment, banks continue to look for growth opportunities and remain competitive, especially in portfolio transactions with stronger debt yields.
This confirms an important point: finance is returning to support hotel transactions, but with greater discipline.
Debt today wants to see cash flows, coverage, margins, sustainability, reliable sponsors, and realistic scenarios. A strong location or an optimistic forecast is no longer enough.
For Italian operators, this means working on the bankability of the hotel.
Bankability does not depend only on real estate value. It depends on the hotel company’s ability to demonstrate defensible revenue, coherent margins, cost control, sustainable capex, professional management, verifiable demand, clear contracts, governed risk, and a credible industrial plan.
A non-bankable hotel may have potential value, but it remains difficult to finance.
Hyatt and Tortuga Resorts: ownership, management, and brand are not the same thing
Toward the end of the panel, Michael Bluhm also referred to the transaction in which Hyatt sold 14 properties to Tortuga Resorts.
Bluhm recognized the quality of the execution but expressed caution about whether that model can be easily replicated. In his view, many large hotel operators remain cautious about taking direct real estate ownership risk, partly because their investors are highly focused on the coherence of the business model.
This touches on a central issue in contemporary hospitality: the separation between real estate ownership, management, brand, and capital.
Large international operators often prefer asset-light models based on franchising, management agreements, soft brands, distribution platforms, and commercial capabilities. Real estate ownership, by contrast, is managed through logic closer to real estate, private equity, and structured finance.
For hotel owners in Italy, this distinction is essential.
Owners must understand which value they actually control: the real estate value, the value of the hotel operating business, the contract value, the location value, the brand value, the management value, or the value of transformation potential.
Without this distinction, it is difficult to negotiate with investors, operators, banks, or industrial partners.
The return of recapitalizations
Another theme highlighted by Bluhm is the possible reduction in single-asset transactions and the return of recapitalizations.
Recapitalization may become a central tool in a phase where many owners do not want to sell entirely, but need capital, financial restructuring, new partners, reduced exposure, or revised governance.
For Italy, this is particularly relevant.
Many hotel companies are attractive from an asset perspective but financially fragile. Others own good real estate but are underperforming operationally. Others are facing generational transitions, debt renegotiations, diverging shareholder objectives, or investment needs that current ownership cannot support.
In these cases, a sale is not the only option.
Intermediate solutions may include a new financial partner, a capital increase, a joint venture, sale and leaseback, business lease, management agreement, franchising, debt restructuring, separation between ownership and operations, real estate value enhancement, or contribution of the asset into a broader platform.
Recapitalization makes it possible to address situations where value exists but cannot be expressed within the current structure.
Checklist: how to make a hotel investable
For a hotel owner, investor, or entrepreneur preparing a transaction, the key question is not only whether the hotel has value, but whether that value is legible to the market.
A hotel becomes more investable when it has:
-
Orderly accounts and reliable data
Revenue, costs, margins, debt, rents, capex, and cash flows must be clear and verifiable. -
Consistent hotel KPIs
Occupancy, ADR, RevPAR, GOP, cost incidence, and profitability must be professionally analyzed. -
A realistic business plan
The plan must be based on credible assumptions, market benchmarks, and alternative scenarios. -
A detailed capex plan
Every intervention on the property should be assessed by cost, timing, operational impact, and expected return. -
Clear governance
Ownership, management, contracts, delegations, responsibilities, and objectives must be defined. -
Readable contracts
Lease agreements, business leases, management agreements, franchising arrangements, and other contracts must be analyzed in relation to asset value. -
Defined commercial positioning
The hotel must know which demand it wants to capture, with which product, and through which distribution strategy. -
Debt sustainability
Debt capital must be compatible with real cash flows and market scenarios. -
A value creation strategy
It must be clear whether value will be created through operations, renovation, repositioning, branding, contracts, real estate development, or exit. -
Documentation ready for investors and banks
An undocumented asset loses liquidity. An orderly asset becomes more negotiable.
This checklist is not only useful for selling a hotel better. It is useful for managing it better.
The Italian market: many opportunities, few truly ready assets
The trends emerging in the United States cannot be transferred mechanically to Italy. The American market has a very different scale, liquidity, financial infrastructure, and transparency.
However, the principles are highly applicable.
Italy has extraordinary hotel assets, often located in destinations with strong international demand. But many of these assets are not yet ready to engage with institutional capital.
The problem is not only size. It is legibility.
An investor wants to understand quickly who owns the asset, who manages the hotel, what the real revenues are, what margin it produces, what capex is required, what urban planning constraints exist, which contract governs operations, which brand is present or possible, what debt sits on the transaction, what return can be generated, and what exit value is realistic.
When this information is not available, orderly, and verifiable, the asset loses liquidity. Not because it has no value, but because that value cannot be translated into a transaction.
The new frontier: making hotels understandable to capital
The challenge in the coming years will be to transform many Italian hotels from simple operating properties into true investable assets.
This requires a cultural shift.
A hotel cannot be read only through occupancy, ADR, RevPAR, and reviews. These indicators are essential, but not sufficient.
The operational dimension must be integrated with real estate, finance, contracts, and strategy.
An investable hotel needs periodic reporting, management control, commercial strategy, a capex plan, orderly contracts, financial sustainability, defined governance, a value enhancement scenario, and a plausible exit strategy.
Only then does the hotel become understandable to capital.
And only what is understandable can be financed, acquired, enhanced, or recapitalized.
Conclusion: in 2026, capital will reward governable hotels
The message from the NYU International Hospitality Investment Forum is clear: capital is returning to hospitality, but with greater discipline.
Michael Bluhm of Jefferies, Jeff Stulmaker of KHP Capital Partners, and Emily Feeney of Noble Investment Group describe three different perspectives on the same phenomenon: the hotel market remains attractive, but it rewards only solid assets, clear strategies, and well-structured transactions.
Tilman Fertitta and Caesars Entertainment show that the market can once again support large, complex deals. KHP Capital Partners and 1 Hotel Seattle point to the strength of luxury lifestyle. Noble Investment Group confirms continued interest in select-service and extended stay. CoStar and the reference to Winter Storm Fern remind us that external factors still affect performance. Hyatt and Tortuga Resorts highlight the strategic importance of separating real estate ownership, brand, and operations.
For Italy, the lesson is concrete.
Hotel value cannot be improvised. It must be built, measured, documented, and governed.
Capital is not looking only for beautiful hotels. It is looking for investable hotels.
It is not looking only for locations. It is looking for governable assets.
It is not looking only for revenue. It is looking for sustainable cash flows.
It is not looking only for opportunities. It is looking for executable transactions.
In the next cycle of hotel investment, the difference will not be between those who own a hotel and those who do not. It will be between those who own an asset ready for capital and those who merely own a building with rooms.
Evaluating a hotel transaction?
If you are considering the acquisition, sale, recapitalization, financial restructuring, or repositioning of a hotel, the first step is to make the transaction legible.
Hotel Management Group supports hotel owners, investors, and operators in the analysis of assets, business plans, governance, value, risks, economic sustainability, and development strategies.
Request a strategic review to assess the real potential of the transaction and transform a hotel into an understandable, financeable, and value-enhancing asset.
Roberto Necci - r.necci@robertonecci.it
