Resort hotels steam ahead to full recovery

Resort hotels steam ahead to full recovery

In their latest report on global real estate, JLL reveals that the lodging industry is well on the way to recovering its pre-pandemic levels. And within it, resort hotels are performing particularly well this year. In the short term, JLL predicts more M&A activity in global hotel investment and in the long term, sustained consumer appetite for experiences. 

New levels of recovery for lodging industry 

The latest JLL Global Real Estate Perspective, published in early August, paints a rosy picture for the lodging sector. It claims that the industry’s recovery “reached new levels in the first half of 2022”. 

The recuperation came on the back of the return to travel across the world and in a context of global economic uncertainty. The sector faces the additional challenge of staff shortages. 

Resort hotels seeing best recovery 

The report highlights the strong return of leisure and resort hotels so far this year. JLL attributes their popularity to a shift in consumer preferences to experiences and travel, rather than buying material goods. Urban hotels are also experiencing a gradual return to pre-pandemic levels. This “greater momentum in their recovery” comes as employees return to office-based working and business travel. 

Highest occupancy rates 

According to JLL, resort locations in Riviera-Maya, Miami and Orlando saw the highest levels during the second quarter of the year. In Europe, the continent’s major cities drove high occupancy between April and June. Luxury hotels in Barcelona, London, Milan and Paris helped “propel the region’s recovery to new heights”. 

In Asia Pacific, occupancy levels were highest in countries with few Covid travel restrictions. They included Thailand, the Maldives and Bali, destinations renowned for their resort hotels. 

Discover what’s driving global hotel investment this year 

Challenges facing the hotel sector 

The JLL report also looked at future trends, both for the short and long term. While the long-term outlook is positive, short-term headwinds could slow activity down during the rest of this year. 

Short-term outlook

Despite hitting double-digit hikes in many developed countries, inflation has yet to curtail travel budgets. However, factors such as the Ukraine war and Covid policies in some parts of Asia could be threats to the lodging industry and hinder full recovery in the near future. 

The report forecasts more M&A activity during the second half of this year.

Long-term outlook

JLL believes that a sustained trend for experiences and travel will continue to drive high levels of demand over the next few years. This demand in tandem with “a relatively muted supply pipeline” leads the company to predict the sector’s full recovery, albeit with the caveat of economic headwinds.

(Source: JLL)