Two megadeals in two weeks have hotel investors asking a question that felt unthinkable not long ago: Is the money back?
Michael Bluhm thinks so. The managing director and global head of real Estate, gaming, lodging and leisure at Jefferies pointed to a pair of landmark transactions as evidence the industry has entered a different era for hotel investment: Tilman Fertitta's agreement to acquire Caesars Entertainment in a deal valued at $5.7 billion in cash and $11.9 billion in debt, and Barry Diller's proposed $18 billion takeover bid for MGM Resorts. Both, he said, reflect growing confidence in hospitality fundamentals and its consumer.
"It's definitely a momentum shift around capital's willingness to take risk and believe in the future [of hospitality]. These are big bets," Bluhm said. "For Caesars, if you include leverage from leases, it's a $30 billion transaction and not something I think you could have got done two years ago."
Hospitality transaction activity rebounded strongly last year and appears to be maintaining that trajectory in 2026, he noted.
"A lot of situations have been pushed out by activists that are now starting to have some momentum, because capital formation is back and active," Bluhm said. "It's not a broad theme throughout the industry. It's very much a case of a K-shaped recovery, and very much a focus on the higher end, where there's a growth trajectory and a growth algorithm that's better than the industry as a whole."
Bluhm was speaking during the "Capital Talks: Signals Behind the Shift in Hospitality Investment" panel at this week's NYU International Hospitality Investment Forum event in New York. Joining him on stage were Emily Feeney, vice president of Capital Markets and Transactions at Atlanta-based Noble Investment Group, and Jeff Stulmaker, partner and chief investment officer at San Francisco-based KHP Capital Partners.
Rising above the noise
Noble has been an acquisitive company over the past 18 months, racking up portfolio deals primarily in the upper upscale select-service and extended-stay space, including a late-April deal to acquire 10 hotels across the U.S.
Feeney said the company was feeling positive heading into 2026.
"We came into the year with a lot of momentum and excitement," she said. "Last year, transaction volume started to pick up. Everyone was getting a little excited about interest rates and the possibility of a cut or two."
She acknowledged that the first quarter brought no shortage of challenges, including severe weather events, lengthy TSA queues linked to a government shutdown and geopolitical uncertainty stemming from the conflict with Iran.
"There has definitely been a lot of noise in the macro environment, but with all of that said, the U.S. still saw RevPAR growth at 3.8 percent," Feeney said. "April has proven to be strong. Noble's portfolio is up 6 percent in April. May has been a strong week-over-week."
She noted that the expectation is for debt and the cost of borrowing to remain flat, and for transaction volume to pick up on the strength of that month-over-month, week-over-week performance and the resilience of the customer.
Reflecting on Noble's recent 10-hotel acquisition, Feeney said the opportunity was too attractive to ignore.
"We don't focus on timing and cycles as much as just finding the right opportunity," she said. "That portfolio was an exceptional opportunity for us. It was a seller that was having some structural changes in their organization, an opportunity for us to expand with high-quality brands across 10 different markets and buy at 25 to 30 percent below replacement cost at an 8.5 percent debt rate."
Discount to replacement costs
That historic discount to replacement cost is also driving deals for KHP Capital Partners, which closed its sixth discretionary real estate fund, the $300 million KHP Fund VI, in April 2025. That was music to the ears of LPs itching to jump back into hotel investment, Stulmaker said.
"When you have that opportunity to buy really high-quality assets and when those lower-cost capital providers aren't really active in the market, that's incredibly interesting… that's really compelling for our LP base," he added.
For investors worried about elevated interest rates and whether deals can generate positive leverage, Stulmaker argued the outlook is more favorable than many assume.
"I always like to remind them, when rates were [low], they could only go up. Now, we have a pretty good chance that they will go down. Inflation may remain sticky and oil prices may go up a little bit but if you're a five-year buyer, my expectation is that rates decline over that period. That helps from a leverage perspective."