The hospitality industry took a huge hit in 2020 due to the COVID-19 pandemic. However, some hospitality investment companies were still able to complete sizable deals despite the challenges. Based on data from major hotel transaction databases, here is a look at the top 10 hospitality investment firms worldwide in 2020 ranked by deal volume.
Blackstone remains top hospitality investor amid pandemic
The private equity giant Blackstone Group retained its position as the most active hospitality investor in 2020 with approximately $1.5 billion in hotel acquisitions. While this deal volume was down 59% compared to 2019, Blackstone still led the pack by focusing on distressed assets. The firm made some opportunistic buys of hotels at deep discounts, betting on a rebound. Key deals included the $197 million purchase of the Conrad Chicago.
Highgate stays busy with over $1 billion in deals
Hospitality management and investment firm Highgate maintained an active year in 2020 as the second most acquisitive investor with over $1 billion in hotel purchases. Highgate was involved in the two largest single-asset hotel sales of the year – the $300 million purchase of the Hilton Minneapolis and the $269 million acquisition of the InterContinental Chicago Magnificent Mile. The firm focused on upper upscale and luxury urban hotels.
Gaw Capital Partners diversifies into hospitality
Hong Kong-based private equity firm Gaw Capital Partners made its first foray into hospitality investments in 2020, spending nearly $1 billion to acquire a portfolio of 7 upscale and upper upscale hotels across the U.S. This made them the third most active hospitality investor of the year. The properties were purchased from Service Properties Trust and include Hyatt, Marriott and Holiday Inn branded hotels.
Joint ventures enable big deals by Service Properties Trust
Real estate investment trust Service Properties Trust (SVC) ranked 4th in hospitality investment volume for 2020 with approximately $950 million in acquisitions. This was fueled by SVC teaming up with other institutional investors to purchase hotels through joint ventures. Notable deals included the $590 million acquisition of a portfolio of 7 extended stay hotels done in partnership with GIC and the $189 million purchase of the Wyndham Grand Clearwater Beach Resort with Brookfield.
Xenia Hotels & Resorts shed non-core hotels
Publicly traded REIT Xenia Hotels & Resorts came in 5th with over $950 million in hotel dispositions in 2020. This sell-off was part of Xenia’s strategy to transform its portfolio towards luxury, upper upscale and lifestyle hotels in key urban markets. The company sold 24 non-core hotels in secondary markets and used the proceeds to acquire iconic luxury properties like the Ritz-Carlton, New Orleans.
Despite the massive challenges for hospitality in 2020, major institutional investors like Blackstone, Highgate and Gaw Capital Partners still got deals done and deployed significant capital. Their long-term approach enabled them to acquire hotels at opportunistic valuations.