Taiwan’s large hotel deals slump as developers step back

The transaction volume between 2024 and 2025 is 90% lower than the prior two years.

Hotel investment activity in Taiwan has contracted sharply over the past two years, with transactions increasingly concentrated in small-scale business hotels, as developers pull back from land-driven acquisitions and institutional investor participation remains limited, according to Savills Taiwan.

In its latest hospitality market update, Savills said hotel transactions in recent years have been dominated by developers acquiring assets primarily for land value, rather than by hotel operators or professional investors seeking income-producing assets.

Since 2024, however, a combination of factors — including a shortage of large hotels available for sale, rising mortgage interest rates, and government measures aimed at cooling the housing market — has slowed developers’ land acquisition momentum. As a result, transaction activity in the hotel sector has declined significantly, Savills noted.

According to Savills data, total hotel transaction volume between 2024 and 2025 reached NT$6.64 billion, representing a 90% drop compared with 2022 and 2023. Deal flow has been largely limited to smaller business hotels, with only two transactions exceeding NT$1 billion during the period.

One of the largest deals involved Crowell Development, which acquired a 40-room motel in Taoyuan City for NT$1.1 billion, translating to approximately NT$27.5 million per room, Savills reported. Another notable transaction saw Highwealth Construction Group purchase a 188-room hotel in Kaohsiung for NT$1.47 billion, or around NT$7.85 million per room.

Savills noted that, in the Kaohsiung transaction, the buyer intends to retain the existing hotel operations without immediate redevelopment plans, highlighting a more cautious and income-focused investment approach in the current market environment.

Looking ahead, Savills said the timeline for a full recovery in inbound tourism remains uncertain, particularly as restrictions on China travel groups are unlikely to be relaxed in the near term. At the same time, an abundant pipeline of new internationally branded hotels is expected to come on stream, intensifying competition for high-net-worth travellers while expanding options for visitors seeking premium and exclusive experiences.

The report also flagged labour shortages and a lack of skilled employees as emerging challenges for hotel operators, adding further pressure to operating margins and service delivery.

According to Savills, these dynamics suggest that transaction activity is likely to remain selective in the near term, with investors focusing on smaller assets, operational stability and long-term fundamentals until clearer visibility emerges on tourism recovery and workforce availability.