JLL's most recent global hotels report comments that International capital continues to play a key role in the hotel investment landscape. "In 2017, over 15% of investment activities, worth US$10Bn, were from international investors."

"But investors from Mainland China have fallen behind the rest of Asia as the largest group of outbound capital, which now accounts for 30% of offshore investments."

This trend is likely to continue in 2018 with Asian investors, notably from South East Asian countries, dominating the offshore investment landscape. This is all driven by renewed interest in diversification, both in terms of location and product.

"Despite recent Chinese government crackdowns on outbound capital, investors here still have the appetite to invest in mature markets across North America, UK, Western Europe and Australia."

However, their investment criteria has changed considerably. While overseas investments under $300M are still permitted, JLL expects there to be a big decline in the acquisition of high-profile trophy assets and large-scale portfolios.

Also stated in the report is that Asia Pacific is forecast to see a decline in deal volumes, largely due to non-repeat of R&F Properties’ acquisition from Dalian Wanda Group in 2017.

"If this transaction is excluded from the 2017 activity, Asia Pacific transactions volume in 2018 is slated to be within 10% of levels seen last year."

"Bright spots in Asia Pacific include Japan. Here, the hotel industry is booming, with the number of international visitors reaching a new high. The government has doubled its inbound tourism target to reach 40 million by 2020, when the Summer Olympic Games take place in Tokyo."

Singapore is increasingly on investors’ lists as well, with improving hotel operating performance and a waning supply pipeline. India is also forecast to receive a jump in investment levels and a number of larger portfolios are expected to transact in 2018, states the report.

Hotel construction is a good indication of where demand is growing, and this year the hotel pipeline momentum continues to shift. The number of hotels commencing construction in North America is slowing, as much of the current remaining pipeline will deliver in 2018. Nevertheless, demand is expected to absorb the additional supply in the medium term.

In Asia Pacific, Outside of Mainland China, rooms under construction as a proportion of existing supply, are slowing slightly. This is due to delivered projects and emerging regions seeing a slowdown in new development.

On the other hand, Mainland China, the Middle East, and Africa are seeing an accelerated pipeline. All these regions are experiencing notable economic growth, and the rise of the middle class has led to an increased demand for travel.

Click here to view and download the global JLL Hotel Investment Outlook 2018 report.

See also:

Australia's best and worst performing hotel markets

Sydney's Ivy nightclub to be replaced by 55-storey hotel

New Zealand’s tourism sector grows 24% as Deloitte identifies it as an industry of opportunity