Transaction Activity Increases
Asia-Pacific hotel transaction volume totaled USD 17 billion in 2025, compared with USD 11.2 billion in 2024, according to Global Asset Solutions’ APAC Hotel Transactions and Market Outlook FY 2025 and H1 2026 report.
Higher borrowing costs, labor and construction expenses, supply chain constraints and limited availability of suitable development sites made it more difficult to achieve targeted returns from new hotel projects.
Investors instead focused on existing assets that can be renovated, repositioned or converted from other uses, reducing project timelines and avoiding some risks associated with ground-up development.
Upscale, midscale and economy hotels accounted for most transaction activity. Owners can upgrade or reposition these properties without undertaking new construction.
Luxury Prices Rise Despite Lower Transaction Share
Luxury transactions represented 16.1% of the market in 2025, down from 41.1% in 2024. However, average luxury hotel pricing increased 24% to about USD 585,000 per key.
Singapore remained the region’s most expensive hotel market across all segments, with average pricing of about USD 656,000 per key. Upscale hotels in the city-state traded at around USD 636,000 per key.
The 634-room JW Marriott Hotel Singapore South Beach was Singapore’s single luxury transaction during the period, selling for close to USD 701,000 per key.
Australia recorded the highest luxury pricing among the markets reviewed, at around USD 673,000 per key. Transactions included the Park Hyatt Melbourne and The Ritz-Carlton Perth.
Payroll, food and beverage, maintenance and capital expenditure can reduce luxury hotel returns even when revenue is high.
Japan Illustrates Shift Toward Existing Stock
Japan recorded 92 transactions in 2025. Of 122 transactions recorded across the 18 months to June 2026, 90 involved midscale and economy hotels.
Luxury hotel supply in Japan remains limited, with some planned Tokyo openings delayed until the following year. Japan, South Korea, Singapore and parts of Australia were markets where supply constraints are becoming more pronounced.
Hong Kong was identified as a market with potential for hotel conversions from other property uses.
International travel continued to support hotel demand across the region. Japan received 42.7 million international visitors in 2025, exceeding 40 million visitors for the first time. South Korea recorded a record 18.9 million visitors.
Singapore reported tourism receipts of SGD 32.8 billion, equivalent to USD 25.8 billion. Australia recorded AUD 39.2 billion, or USD 27.9 billion, in international visitor expenditure.
Operating Performance and Debt Costs Remain Concerns
Hotel owners will need to place greater emphasis on asset management as market conditions become more uncertain, including monitoring operator performance, controlling capital spending, protecting margins and assessing whether a hotel’s market position supports its pricing.
Higher energy prices, inflationary pressure and rising interest rates have increased debt costs. Geopolitical uncertainty, including the war involving Iran, could affect travel patterns, flight capacity and airfares.
Value creation is increasingly likely to come from identifying underperforming existing hotels and improving their operations, positioning or physical condition, while construction and financing costs remain elevated.
Discover more at Global Assets Solutions.
