The resort sector has accounted for 18.4 percent of total investment transaction volume in the hospitality sector, according to Jones Lang LaSalle. The $2.46 billion of transactions through August 2013 marks the highest volume in the segment since 2007.
The U.S. resort sector represents 13 percent of the total U.S. hotel room supply, which is comprised of more than 3,900 hotels with 608,000 rooms. The resort market’s RevPAR and ADR have surpassed the previous 2007 peak with an average RevPAR of $102.99 and an average ADR of $153.81 through August.
“Given the intense capital requirement of building a new and competitive resort⎯⎯as well as the lack of financing for such developments⎯⎯there are few new four-and-five star resorts under construction. The muted development is driven by the stringent entitlement processes, minimal developable land, and the rising cost of materials. These factors are pushing down cap rates on existing well-positioned, cash-flowing resorts as competition increases,” says Art Adler, Americas CEO of Jones Lang LaSalle’s Hotels and Hospitality Group. “The steady improvement in the market will result in a lengthier and more robust up-cycle⎯⎯providing new owners with significant runway of strong operating performance.”
During the downturn, hotels, particularly resorts, held off on renovations. Now that the market is rebounding, many owners have the capacity to add amenities. 

”Aside from attracting and retaining their customer base with a repositioned physical plant and new recreational amenities, owners who are able to go-to-market in the next three years with renovated product can capitalize on the upswing, and the lower cost-of-capital offered by REITs and offshore investors seeking to enter the resort space. Private equity funds also have their eyes on value-add resort acquisitions,” says Gregory Rumpel, managing director of Jones Lang LaSalle’s Hotels & Hospitality Group.
Recent resort trades include the Miami Beach Resort, the Pier House Resort and Spa Key West, and the Park Central Miami Beach. Jones Lang LaSalle is currently in the market with the Ritz-Carlton, Kapalua Resort among other high-profile resort properties.
