Asia Pacific hotel investment surged 21% year-on-year to US$8 billion in the first half of 2026 (1H26), as strong travel demand, limited new supply and improving operating performance continued to draw capital into the sector.
According to CBRE’s 2026 Asia Pacific Hotels & Hospitality Performance & Outlook Report, Japan, China and Korea led investment activity during the period.
China recorded one of the region’s strongest rebounds, with hotel transaction volumes more than doubling from a year earlier, supported partly by the extension of China Real Estate Investment Trust eligibility to four-star-and-above hotel assets.
Japan continued to attract domestic and cross-border investors, while Korea benefitted from strong hotel fundamentals and rising international visitor demand.
“Hotels have become one of the most compelling real estate investment sectors in Asia Pacific,” CBRE Asia Pacific Head of Hotels & Hospitality Steve Carroll said.
He said strong travel demand and limited new supply were supporting both operating performance and asset values, although higher borrowing costs could moderate transactions in some markets in 2H26.
Hotel fundamentals have also strengthened, with average daily rates at or near historical highs across most Asia Pacific markets. Revenue per available room continued to rise, largely driven by higher room rates.
Occupancy, however, remains below pre-pandemic levels in much of the region as operators prioritise pricing over occupancy growth. Korea and Vietnam bucked the trend, surpassing pre-pandemic occupancy levels on the back of robust travel demand.
Limited new supply is expected to remain a key support for existing hotel assets. Excluding China, Asia Pacific hotel supply is projected to grow by only around 1% annually between 2025 and 2029, as elevated construction costs constrain new development.
China is expected to account for nearly half of the region’s projected new hotel supply.
Against the tighter development backdrop, investors are increasingly pursuing repositioning and adaptive reuse opportunities instead of ground-up projects.
The trend is particularly visible in Hong Kong, where some hotels are being acquired for conversion into student accommodation and other living-sector uses.
CBRE Asia Pacific Head of Research Ada Choi said elevated construction and financing costs were making new hotel development increasingly challenging, prompting investors to unlock value through repositioning and conversion strategies.
“With new supply expected to remain limited in many markets, existing hotel assets are well positioned to benefit from sustained demand growth and improving operating performance,” she said.
