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Luxury Hospitality Continues to Attract Investors in 2025

By Cristina D’Agostino16 janvier 2025

Hyatt, LVMH, Accor: the luxury hospitality sector witnessed significant investment in 2024, and this trend shows no signs of slowing down in 2025. With strong demand for premium accommodations, the number of ultraluxury hotel rooms is projected to grow by 12% by 2033. A key driver is the sector's annual return rate of 6% in 2022, a figure expected to remain steady. Here's our in-depth look.

Last December, LVMH acquired a minority stake in Les Domaines de Fontenille, a group of eleven luxury establishments in France, Italy and Spain, partnering with investment firm Anaïs Venturess (Domaines de Fontenille)

$391 B

Estimated value of global spending on luxury hotels in 2028

$213 B

Luxury hotel market value in 2023

+46%

Growth in ultraluxury hotel rooms over the last ten years

The preferred model for groups remains franchising because it is the least financially risky, the fastest for expansion, and requires little cash. But that doesn’t mean it’s the most profitable model

Philippe Rubod, President and CEO of Swiss Hospitality Global

At the International Luxury Travel Market (ILTM) in Cannes last December, Hyatt Hotels Corporation announced plans to open over 50 new luxury and lifestyle hotels by 2026. The company, valued at over $11 billion in 2023 (Statista), ranks as the fourth-largest hotel group globally, trailing Marriott International with a $60.5 billion valuation. Since 2017, Hyatt has doubled its number of luxury rooms and quintupled its lifestyle offerings, reaching 256 hotels in these segments by 2024. In the same month, luxury giant LVMH, owner of brands such as Belmond, Bulgari, and Cheval Blanc, acquired a minority stake in Les Domaines de Fontenille, a collection of 11 high-end properties in France, Italy, and Spain. Partnering with investment firm Anaïs Ventures, LVMH views this move as a strategic extension of its hospitality offerings. Jean-Jacques Guiony, LVMH's CFO and soon-to-be head of its Moët & Hennessy division, commented: "This financial investment in Les Domaines de Fontenille is an opportunity to explore a complementary segment within our hospitality portfolio."

This diversification aligns with an increasing appetite among luxury consumers for exclusive destinations that combine natural settings with wellness and gourmet experiences. The EHL Insights Reports on Hospitality Trends 2025 notes: "In response to rising mental health concerns, travelers seek enriching experiences that enhance quality of life while nurturing the mind, body, and soul. This transformative travel trend allows consumers to reconnect with themselves through the quality of their stay."

Mergers and Acquisitions Surge in Luxury Hospitality

The diversification of LVMH's hotel offer corroborates the growing interest of luxury customers for exclusive, high-end destinations in the heart of vast natural spaces (Splendido, Belmond Hotel)

The luxury hotel sector's growth is evident in the increasing number of ultraluxury hotel rooms, which rose by 46% over the past decade to 197,000 globally in 2023, according to Statista's The Rise of Luxury Hospitality report. Investments in this segment soared, with the total value of mergers and acquisitions reaching $286 million in 2023—nearly triple the $106 million recorded in 2022. In Europe, transactions involving hotels priced at over €1 million per room accounted for 12.2% of the market, nearly doubling year-on-year. According to the Rise of Luxury Hospitality report, This trend reflects the influx of new investors, including real estate developers and private equity magnates, drawn to the sector's high profitability. The annual return rate exceeded 6% in 2022, according to real estate firm JLL, the highest figure of the decade. For example, according to Statista, Saudi Arabia's Public Investment Fund (PIF) injected over $1 billion into the Aman Group in 2023 and purchased a 49% stake in Rocco Forte Hotels for $1.8 billion the previous year. Rocco Forte owns iconic properties such as Brown’s Hotel in London and the Hotel de Russie in Rome.

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