The pandemic was difficult for hotels, with lockdowns and health issues preventing people from traveling too far from home. When and if they would recover was debatable, according to a JLL analysis.

However, the turnaround for the luxury segment of the sector was remarkable. Now, things seem to have returned to normal.

Zach Demuth, Global Head of Hotel Research at JLL, says that global hotel liquidity reached $51 billion last year, noting that more than 20% of single-asset liquidity came from luxury assets. It was one of the highest ever recorded in the hotel sector, according to JLL data.

Now, he says, "Global investors are setting their sights on the luxury sector."

The increase in demand can be attributed to two main factors: the improved performance of luxury hotels and attractive profit margins. Due to higher profits, returns for luxury hotels are also unmatched compared to recent history.

Luxury hotels are likely to register strong performances again this year, according to JLL's Global Hotel Investment Outlook. This prediction is fueled by the blend of daily life with travel and an increase in global wealth, further expanding the customer base.

"Luxury, in its current interpretation, has moved away from traditional formalities," says Marc Socker, who manages a real estate and hospitality portfolio and is the co-CEO of Maybourne Hotel Group.

"Instead, it has evolved to be more culturally and demographically inclusive, highlighting a significant departure from old-fashioned exclusivity." (Photo: Freepik)