Guess which country led APAC hotel investments in H1 2025

Over 80% of the region’s $4.7b hotel investment volume came from five countries only.

Investment in Asia Pacific hotels reached $4.7 billion in the first half of 2025, with investors focusing more selectively on the region's more established hospitality markets, with 84% of total transaction volume occurring in just five key countries, according to JLL.

Japan continued to lead regional hotel investment with $1.5 billion in transactions, followed by Greater China ($744 million), Australia ($664 million), Singapore ($546 million), and South Korea ($504 million). Collectively, the other markets across the region accounted for $758 million, representing 16% of total hotel investment volume. Singapore’s investment figures underscore its safe-haven status and ongoing transformation through high-profile shophouse and boutique hotel deals.

Here’s more from JLL:

Capital deployed in the first half of 2025 represented a 23% decline compared to the same period in 2024, reflecting a more cautious investment environment amid ongoing global macroeconomic uncertainty. Investors have gravitated to safe haven markets, while decision-making timelines lengthened. At the same time, the bid-ask spread between seller expectations and buyer valuations have also widened with sellers holding firm on price expectations and buyers applying greater scrutiny, leading to extended due diligence periods on both sides of transactions.

"Coming off a high base last year, the level of investment moderation is indicative of a more cautious investment market whereby a realignment of capital sources in the hotel investment landscape is occurring," said Nihat Ercan, CEO, JLL Hotels & Hospitality Group, Asia Pacific. "In our interactions, although institutional investors remain selective, private capital is moving decisively to secure prime hospitality assets that offer both defensive income characteristics and growth potential, which should ensure an uptick in activity in this year and into next."

According to JLL analysis, private equity firms have increased their capital allocations to hospitality assets, with a 6% year-over-year rise in investment volumes. This shift represents strategic positioning to capitalise on market dislocations and potentially undervalued assets in key gateway markets.

Additionally, High Net Worth Individuals (HNWIs) from within the region have emerged as increasingly active buyers in H1 2025, seeking portfolio diversification through hotel investments, with capital invested into hotels growing by 54% from the same period last year.

The outlook for the region’s hospitality industry remains positive in the long-term, driven by solid fundamentals. International tourist arrivals across Asia Pacific increased by 12% in Q1 2025 compared to the same period last year, driving a supportive growth in revenue per available room (RevPAR) across the region. This performance improvement has bolstered investor confidence in the sector's recovery trajectory.

Key gateway cities demonstrated varied performance. Singapore maintained ADR in excess of 2019 figures and occupancy rate held steady from last year, demonstrating the market’s resilience and ability to attract high-value tourism segments. Tokyo recorded more than 80% occupancy with ADR above pre-pandemic levels, while Sydney hotels held strong on occupancy at just below 80% while pushing ADR higher than pre-pandemic benchmarks.

Total hotel transaction volume across Asia Pacific is projected to reach $12.8 billion for the full year 2025, representing about 5% increase from 2024. This forecast anticipates accelerated investment activity in the second half of the year as backlog of deals in due diligence are expected to settle then, says JLL.

Singapore's projected full-year hotel transaction volumes are forecast to reach $1.2 billion, driven by the global flight-to-safety trend. Investor preferences largely fall into two categories – hybrid hotels with extended-stay components, which attract private equity investment, and luxury boutique hotels, which appeal to high-net-worth investors. The increasing attention on boutique hotel transactions, exemplified by deals like Duxton Reserve and 21 Carpenter, reflects this dynamic shift in investor preferences.

“Singapore’s boutique hotel sector continues to attract private capital seeking both diversification and long-term capital value. We’re seeing a strong appetite for properties that offer authentic guest experiences and integration within the city’s cultural fabric, particularly heritage hotels, which remain scarce and lend themselves to resilient returns in a dynamic market. Boutique hotels not only contribute to the preservation of Singapore’s heritage, but they also exemplify adaptive reuse and innovation in hospitality, supporting both sustainable investment and the city’s global appeal,” said Tan Ling Wei, Senior Vice President, Investment Sales, JLL Hotels & Hospitality Group, Singapore.

Liquidity is expected to remain prevalent in the traditional markets of Japan, Australia, Greater China, Singapore and South Korea, while markets like Vietnam and Malaysia should benefit from strong tourism momentum.

"The final six months of 2025 presents compelling entry points for strategic investors looking to deploy active capital," says Ercan. "Encouragingly, we anticipate private equity funds, family offices, and regional operators with access to private capital to emerge as the most active buyers through year-end as they capitalise on assets requiring operational expertise to maximise value."