Chinese Investors And The Draw Of U.S. Hotel Investment

Chinese Investment in U.S. Hotels: A Growing Trend - By Li Chen

U.S. hotel demand is increasing out of China, Chinese investors continue to purchase stakes in U.S. hotel properties, and major Chinese real estate companies have begun to develop mixed-use projects in the U.S.

HVS Since I began writing about Chinese hotel investment and tourism trends in the U.S., activity from China has not only grown but also diversified. Over the last two years, more and more Chinese investors have been searching for hotels to purchase in gateway cities like Los Angeles, San Francisco, and Seattle in the west, and New York in the east. 

Collage of pictures from three hotels in ChinaSome recent examples of big hotel acquisitions by Chinese investors in Greater Los Angeles include the Sheraton Gateway Los Angeles, the Four Points by Sheraton Los Angeles International Airport, the Torrance Marriott South Bay, and the DoubleTree Monrovia; together, these hotel purchases total well over a quarter of a billion dollars. Chinese investors have bought up many limited- and select-service hotels as well. Across the wide spectrum of hotel types and tiers, the trend of Chinese investment in U.S. hotels has realized enormous growth.

Chinese Investors and the Draw of U.S. Hotel Investment

When we speak of “a” Chinese hotel investor, we may mean an individual, a bank, a hotel operator with a stake in the property, a real estate firm, or even an import/export company or an airline company. There are three principal attractions for Chinese investment in U.S. hotels and real estate. First, the U.S., despite some credit rating setbacks over the past several years, leads the world in terms of the most attractive capital appreciation among nations. 

Second, compared with similar markets and propertie s in China, certain hotel properties in the U.S. can be had at a lower price premium (in terms of price per room). Finally, the number of Chinese travelers to the U.S. has been growing dramatically; over 1.8 million Chinese tourists visited the U.S. in 2013. The U.S. Department of Commerce’s Office of Travel and Tourism Industries expects that number to rise to more than 2.1 million in 2014; as U.S. hotels compete to capture this influx of demand, Chinese investors are positioning their properties for the greatest possible benefit.

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