Asia Pacific Hotel Investment Slows Amid Selective Capital Flows

Gateway Cities Lead Activity in 2025

Investment in Asia Pacific hotels reached $4.7 billion in the first half of 2025, as investors concentrated on the region’s most established markets, according to a new report from JLL. Just five countries — Japan, Greater China, Australia, Singapore, and South Korea — accounted for 84 percent of total transaction volume, underscoring a flight toward perceived “safe haven” destinations amid ongoing macroeconomic uncertainty.

Japan led the region with $1.5 billion in hotel transactions, followed by Greater China ($744 million), Australia ($664 million), Singapore ($546 million), and South Korea ($504 million). Other markets collectively contributed $758 million, representing 16 percent of total investment. Overall, regional capital deployment was down 23 percent year-over-year, reflecting a more cautious investment climate.

“Investors are gravitating to gateway cities where fundamentals remain strong, but decision-making timelines have lengthened,” said Nihat Ercan, CEO of JLL Hotels & Hospitality Group, Asia Pacific. “Seller expectations and buyer valuations have diverged, resulting in extended due diligence periods.”

Within Southeast Asia, Thailand’s hotel sector demonstrated resilient liquidity, with domestic investors dominating deals. $301 million (THB9.8 billion) was invested in Thai hotels in H1 2025, with Bangkok remaining the country’s most sought-after market. “We expect investment volume to exceed $650 million (THB20 billion) by year-end,” said Pimpanga Yomchinda, EVP, Investment Sales, JLL Hotels & Hospitality Group, Asia Pacific.

Performance in Key Markets

Across Asia Pacific, hotel performance varied across gateway cities. Tokyo posted occupancy above 80 percent, slightly below pre-pandemic levels, while average daily rates (ADR) exceeded 2019 benchmarks. Singapore’s occupancy remained stable, with ADR surpassing pre-pandemic levels but declining slightly from the previous year. Sydney’s occupancy approached 80 percent, with flat ADR trends, while Bangkok hotels recorded ADR significantly above prior peaks despite tourist arrivals dropping 6.3 percent year-over-year in the first seven months.

The first half slowdown reflects a broader market recalibration, coming off a high base in 2024. “While institutional investors remain selective, private capital is moving decisively to acquire prime hospitality assets offering both defensive income and growth potential,” said Ercan.

Private Capital Gains Traction

JLL analysis indicates rising interest from private equity and high-net-worth individuals (HNWIs). Private equity allocations to hotels increased 6 percent year-over-year, while HNWIs invested 54 percent more compared to H1 2024, seeking diversification and strategic entry points in gateway markets.

Long-Term Outlook

Despite near-term caution, the long-term outlook remains positive. International tourist arrivals in Asia Pacific rose 12 percent in Q1 2025, supporting revenue per available room (RevPAR) growth and reinforcing investor confidence. Total hotel transaction volume for 2025 is projected at $12.8 billion, a 5 percent increase from 2024, with expectations that deals currently in due diligence will close in the second half of the year.

Liquidity is expected to remain concentrated in Japan, Australia, Greater China, Singapore, and South Korea, while emerging tourism markets such as Vietnam and Malaysia may see increasing investor interest. “The latter half of 2025 offers compelling entry points for strategic investors,” said Ercan. “Private equity funds, family offices, and regional operators with operational expertise are likely to lead activity, targeting assets that can unlock value through hands-on management.”