Dissatisfied guests at a Hilton Garden Inn in downtown Austin, Texas, have reviewed the hotel as "very run down" and "janky," in reference to faulty elevators. One guest said the beds were "rock hard," and another called the place "a complete nightmare from start to finish."
That is a big reason the new owner decided to buy it.
The hotel is one of many around the U.S. that have languished for years in need of a refresh but whose operators have struggled to find the cash to pull off the renovations.
Now, as prices decline and the number of new hotels under construction dwindles, new owners are stepping in to buy rundown lodgings and whip them into shape. "It's gonna be sparkling," said Drew Bridges, an executive at JMI Realty, which bought the 254-key Austin hotel in June. The company paid about $100,000 per room, and plans to spend another $65,000 per room on renovations, including updates to the restaurant, meeting areas and lobby.
Hotel sales nationwide increased by 28% in the first two quarters of 2026, compared with the same quarters last year, according to data-provider MSCI. Sales are strongest in the luxury sector, but deals for middle tier, or so-called select service hotels, also have been rising from a 2024 low point, a report by JLL Research found.
Lower short-term interest rates have helped spark more hotel sales this year. And higher-than-expected hotel revenues, helped by the World Cup, have made lodging more attractive to investors.
Meanwhile, data-center construction remains a boon to hotels; business activity associated with the massive projects, including construction, is adding to bookings across the country. And stock-market earnings are fueling travel demand from wealthy customers.
"Demand on the high end has been phenomenal," said Jan Freitag, a hotel analyst at CoStar.
Luxury hotels changing hands this year include the $1.4 billion sale of the Grande Lakes Orlando Resort in Florida, a 409-acre property that includes both a JW Marriott and a Ritz Carlton. The Ritz Carlton Central Park South in New York City recently sold for $320 million.
Investors also see green shoots for more modest hotels, where many properties are in need of an overhaul and owners are often more inclined to sell than reinvest.
Hotel brands typically require owners to make improvements, such as refurbishing rooms and updating lobbies, every 7 to 10 years. But many hotels, especially those facing steep debt payments, have been low on the cash required to renovate and are behind schedule.
A number of such hotels won't get refreshed until they finally sell, said Greg Friedman, chief executive at Peachtree Group, a company in the market for properties where owners are late to make updates. Peachtree is in contract to buy one such hotel in the Florida Panhandle. Major hotel brands have recently become more aggressive in enforcing renovation requirements, Friedman said. "That is creating stress on ownership groups, forcing them in a lot of cases to sell assets," he said.
Several hotel owners have recently chosen to part with properties that faced large future renovation bills. In July, Park Hotels & Resorts, a publicly traded owner, sold a Hilton in Short Hills, N.J., for $12 million, or less than half the expected cost of coming property improvements.
Acrophyte Hospitality Trust, a Singaporean investment firm, sold a Hyatt Place in Memphis in July for $6.9 million, a 10% discount from its valuation in December. Acrophyte said it sold the property in part because of future capital expenditures required for the struggling hotel.
Bridges said online complaints about hotels in decline are useful data as the company looks for new investment opportunities. He is using artificial intelligence to crunch negative reviews from guests on websites such as Yelp and Tripadvisor to help identify just how banged up a potential hotel investment is.
The Austin hotel that Bridges's company bought was owned by Ashford Hospitality Trust, a publicly traded hotel owner that has sold several hotels in the last year to pay down debts. In April, Ashford said the sale of six hotels in its portfolio would save the company $60 million it otherwise would have spent on property upkeep.
Another factor underlying investor enthusiasm for hotel purchases is the low supply of new lodgings. New room additions are running at a rate of 0.5% of existing hotel supply this year, well below the long-running average of 1.6%, Freitag said. The gap between the cost to build and the cost to buy an existing hotel has widened. "If you want to be in the industry and you can't build, you have to buy," he said.
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