Why Hotels Are Becoming Popular Investment Choices in 2025

Hotel investments are gaining traction among investors seeking steady returns, long-term income, and portfolio diversification. Unlike traditional real estate, hotels offer multiple revenue streams and a truly passive income experience, making them an attractive alternative.

According to JLL’s 2025 Global Hotel Investment Outlook, global hotel investment volume is projected to increase by 15% to 25% compared to 2024. This surge comes as traditional property markets slow, and investors look for more dynamic opportunities.

"Hotel investments stand out because they combine strong returns with simplicity. With the right operator, investors enjoy passive income while the hotel does all the work," says Matt Sully, CEO of APFG.

Here’s why more investors are turning to hotel property investments.

Diverse & Long-Term Revenue Streams

Unlike residential properties that rely solely on rent, hotels generate revenue from multiple sources, including:

• Room bookings
• Food & beverage sales
• Spa services & event spaces
• Parking & guest amenities

This diversification creates stable returns, reducing the risk of income gaps. Moreover, hotels are built for longevity, generating continuous income through daily operations, rather than sporadic rental payments.

"With hotels, your investment works for you year-round," Sully adds. "The combination of room revenue, F&B sales, and guest services ensures consistent returns, even in low seasons."

Higher Returns in Booming Tourist Markets

Hotel investments often outperform traditional real estate, especially in high-tourism destinations. While residential yields average 3-4% per year, hotel returns typically range between 6-12%, with markets like Bali often exceeding that.

In Seminyak and Berawa, forecasted hotel returns range from 14-17%, thanks to strong occupancy rates and premium daily rates (ADR). This profitability is driven by consistent international tourism and limited supply of quality accommodations.

Additionally, hotels can adjust pricing based on demand, ensuring optimal returns year-round, unlike fixed-term residential leases.

Lifestyle Hotels: The Future of Hospitality

Modern travelers want more than just a place to sleep—they want an experience. This has fueled the rise of lifestyle hotels, which combine luxury with local culture and personalized service.

In 2025, lifestyle hotels are expected to account for 23.1% of new hotel openings, nearly doubling from 11.7% in 2000. These properties command higher occupancy and premium rates, translating into stronger investor returns.

Partnering with Trusted Operators

The success of a hotel investment largely depends on who manages the property. Seasoned operators understand market dynamics, optimise occupancy, and ensure strong returns.

Our partners on the ground in Bali, Geonet Property & Finance Group have recently signed a 10-year deal with Cross Hotels & Resorts, wholly owned by Flight Centre Travel Group. This global backing provides market insights, efficient operations, and a strong guest pipeline, ensuring investors enjoy stable returns.

Another partner project with GPFG is TUI Blue Berawa, operated by the one of the world’s largest travel operators TUI Blue.

Capital Growth & Investor Confidence

Beyond passive income, hotel investments offer strong capital appreciation, particularly in high-demand tourist hubs. As tourism grows and land becomes scarcer, hotel properties naturally increase in value.

For example, Bali’s Seminyak and Berawa regions saw an 8.9% increase in ADR and a 3.7% rise in occupancy in 2024, according to Colliers. These trends are expected to continue, making hotel investments a compelling long-term strategy.

Is Hotel Investment Right for You?

Whether you’re a seasoned investor or new to property, hotel investments offer a unique blend of strong returns, passive income, and long-term growth.

"For investors looking to diversify, hotels provide the perfect balance of income, lifestyle perks, and capital growth," says Sully. "It's an investment that works for you while you enjoy the benefits."

For more information on hotel investment opportunities with APFG, contact our team today.