Despite still strong fundamentals in hotel operating performance, the capital markets environment for the hotel sector has been going through choppy waters this year. A brief review of key investment metrics illustrates some of the challenges.

Tepid hotel investment activity continued in Q2 2016. U.S. hotel acquisitions totaled $6.5 billion in Q2 2016, down 50% year-over-year. Similarly, the H1 2016 total reflects a 55% decline from H1 2015.

Fortunately, the year-over-year drop in single-asset purchases was less severe. Buying activity of individual assets provides a better measure of investment momentum, and H1 2016’s $11 billion total reflected a more moderate drop of -33% compared to last year.

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