US hotel transaction volume rose 14.4% year over year to $5.6 billion in the first quarter of 2026, with a cluster of luxury asset sales doing much of the lifting, according to JLL's quarterly investment report.

The quarter saw 227 transactions, up 35% year over year. Single-asset deals accounted for $5.4 billion of the total, a 33% increase, and five of those single assets traded above $100 million each.

The recovery remains relative. Total volume still sits 47% below the cyclical peak of 2022, a reminder that the deal market is climbing off a low base rather than approaching its prior high-water mark.

Which markets and assets drove the money?

Three markets dominated Q1 activity:

• Orlando, Florida: $842 million
• New York City: $588 million
• Jackson Hole, Wyoming: $362 million

Host Hotels & Resorts set up two of those numbers earlier this year, selling the 444-key Four Seasons Resort Orlando and Residences Jackson Hole for a combined $1.1 billion. In Manhattan, Gencom acquired the 253-key Ritz-Carlton New York, Central Park for an undisclosed sum.

Private equity accounted for 34% of Q1 transactions, a share JLL attributes to "stabilizing interest rates and favorable market dynamics." In its 2026 Global Hotel Investment Outlook, JLL had predicted private equity would be "back on the offense" and more willing to deploy capital — a projection the Q1 numbers now support with measured deal flow.

Institutional capital is also returning on renewed confidence in hotels as an asset class, which JLL views as resilient relative to other property types such as commercial. Both full-service and select-service assets continue to trade at discounts to replacement cost, keeping the buy-side calculus favorable.

What do the operating numbers show?

Domestic RevPAR grew 3.8% year over year in Q1, but the headline masks a widening split. Luxury RevPAR rose 7.8%, while the economy segment fell 2.1% — a bifurcation that carried over directly into investment strategy.

JLL reports that investors concentrated on three target categories: luxury assets, premium select-service and extended-stay hotels. Luxury benefits from what JLL calls "resilient spending" by high-income travelers; select-service draws capital for its "efficient operating models" and durable returns.

The spread between the top and bottom of the market is now the central variable in who buys what — and at what price.

What happens next?

JLL's 2026 outlook stays positive, with large-scale transactions expected to "lead the way." Geopolitical uncertainty and private credit concerns have, per the report, "not adversely impacted debt liquidity."

The brokerage predicts a "more optimistic environment for 2026," driven by improved debt market conditions it expects will "facilitate a rise in high-value asset and portfolio-level sales" through the remainder of the year.