Last Updated: June 2026
Hospitality rental property investing is a specialized real estate strategy that involves investment in properties specifically in the hospitality industry such as lodging, recreational facilities, travel and tourism properties, food and beverage establishments, and event or meeting spaces. This type of investing allows capitalization on the lucrative hospitality sector, but it requires a thorough understanding of the industry, superior guest services, and efficient operations management.
On This Page
- What is Hospitality Real Estate Investing?
- 5 Categories of Hospitality Real Estate
- 21 Types of Hospitality Properties
- 5 Types of Hotels
- Hospitality Real Estate Market
- 9 Ways to Invest in Hospitality Real Estate
- How to Buy a Hospitality Rental Property
- Hospitality Real Estate Articles
- Top Hospitality Real Estate Investor Tools
- Hospitality Real Estate Investing Calculators
- Hospitality Real Estate Insurance
- Hospitality Real Estate Loans
- Frequently Asked Questions About Hospitality Real Estate Investing
🪄 RentalRealEstate Quick Answer
Hospitality real estate investing is a specialized strategy involving properties in the lodging, food and beverage, travel and tourism, recreation, and event sectors — including hotels, resorts, motels, restaurants, and entertainment venues. With over 5 million hotel rooms alone in the United States, the hospitality sector represents a significant and lucrative segment of commercial real estate.
This page covers hospitality investment strategies (including direct ownership, development, BRRRR, turnkey, note investing, syndication, and REITs), property types across five hospitality categories, financing options, and the largest hospitality real estate companies.
What is Hospitality Real Estate Investing?
Hospitality Real Estate Investing Definition
Hospitality real estate investing refers to the acquisition, ownership, management, rental, or sale of properties specifically designed for accommodation or leisure services. This category predominantly includes hotels, motels, resorts, and other lodging facilities where services are provided against payment.
Multifamily Rental Investing Explained
Hospitality real estate investing centers on properties that cater to travelers and guests, offering not just accommodations but often additional amenities like restaurants, spas, or conference spaces. These investments are deeply influenced by travel trends, seasonal variations, and the broader health of the tourism industry. Success in this sector often demands a keen understanding of guest preferences, effective marketing strategies, and the ability to adapt to changing market dynamics.
5 Categories of Hospitality Real Estate
If you’re thinking of investing in a hospitality rental property, you might be wondering what types of properties fall into this category of rental real estate. Hospitality properties can broadly be divided into five main categories: Food and Beverage properties, Travel and Tourism properties, Lodging properties, Recreation properties, and Event & Meeting properties. We take a look at each category below:
Food and Beverage Properties
Food and beverage properties, also known as F&B, are a type of hospitality business that provides food and drinks to customers. F&B businesses are found in a variety of settings, including retail properties, hotels, resorts, casinos, and event venues. Many of these businesses are part of larger hospitality companies, while others operate independently. No matter their size or ownership, all F&B businesses share a common goal: to provide their guests with a positive dining experience. To achieve this goal, F&B businesses must focus on several key areas, including menu selection, food and beverage preparation, customer service, and ambiance. These factors all play a role in creating a positive dining experience for guests, and they must be carefully managed by F&B businesses in order to be successful.
Travel and Tourism Properties
Travel and tourism properties help facilitate the ability for people to visit and travel outside of their immediate surroundings, whether it’s a student traveling to see The Colosseum in Rome after a semester at college or a traveling salesperson on a Midwest tour for their latest widget. Within the broader context of hospitality, travel, and tourism touches almost every aspect of the category, including where people stay, how they spend their recreation time, where they eat, and so on. The travel and tourism sector describes one of the globe’s largest industries with a global economic contribution of over $9 trillion dollars. Travel and tourism properties are usually located in areas that are frequented by tourists. These areas can be desirable for tourists to visit for a variety of reasons such as favorable weather, tourist attractions, and well-known famous cities around the globe (e.g. London, New York City, etc).
Lodging Properties
A lodging property is a property that provides overnight accommodation, typically for a fee. Hotels, short and long term vacation rentals, motels, resorts, and bed and breakfasts are all examples of lodging properties. Lodging properties can also include apartments, condos, and other types of housing that are rented out to guests. The operators behind these properties can range from a sole mom-and-pop operator, to large multinational hotel operators like the Hilton Worldwide Holdings Inc. (Commonly just called “Hilton”) who oversee several different brands of lodging properties at different levels of affordability. Lodging properties are usually located within close proximity to tourist areas, or near convenient freeway access for travelers.
Recreation Properties
Recreation properties are those that support businesses that give customers the ability to entertain themselves for typically a short period such as a few hours to a few days or weeks. In urban settings, recreation properties are usually developed to support a recreational business (e.g. Movie Theater), but in more rural settings recreational properties can be developed to support more outdoor-friendly activities (e.g. Camping). Examples of recreational properties can range from water parks, campgrounds, zoos, parks, swimming pools, hunting grounds, and more. Most recreation businesses generate revenue via admission tickets, concession sales, food and beverage sales, and merchandise sales.
Event and Meeting Properties
The meetings and event industry helps facilitate business meetings, social gatherings, and large social events. They can range in size from a small wedding all the way up to full stadiums hosting NFL football games or a famous musician’s concerts. Event centers have become focal points for many cities due to the revenue they bring in and the significant cultural opportunities they offer visitors. Owners of these properties also usually sell “ownership rights” in order to allow a private business to amend their company name to the property (e.g. Crypto.com Arena for $700 Million). Common events held at these types of properties include sports games, concerts, holiday celebrations, business, and trade shows, farm shows, large family reunions, and other uses where folks need to gather en masse.
21 Types of Hospitality Properties
Within the 5 categories of hospitality properties are different types with each having its own set of investment considerations. Below we’ll explore the different types of hospitality properties and what you need to know before investing in one since each offers different amenities and services to its guests.
Hotels
This is the most common type of hospitality property. Hotels range in size from small, independently-owned properties to large, international chain hotels. Most hotels offer a variety of room types, including standard rooms, suites, and executive-level rooms. Services typically offered by hotels include room service, laundry service, concierge service, and valet parking.
Motels
Motels are typically smaller than hotels and offer fewer amenities. However, motels are often less expensive than hotels and are a good option for travelers looking for a place to stay for a night or two.
Resorts
Resorts are large-scale properties often found in picturesque locations such as beaches, mountains, or islands. They provide a comprehensive experience, offering accommodations, dining, recreational activities, and sometimes even spa services. Guests can enjoy a self-contained vacation without needing to leave the property.
Restaurants
Restaurants are establishments primarily focused on serving meals to customers. They range from fast-food joints to high-end dining experiences, with diverse cuisines and ambiances.
Food Halls
Food halls are large spaces housing various individual food vendors and stalls, often offering a diverse range of cuisines. They provide a casual, communal dining experience where visitors can sample multiple dishes. Food halls are often found in urban areas, shopping malls, or markets and have shared seating.
Bars and Pubs
Bars and pubs are establishments where people go to socialize, relax, and enjoy beverages, especially alcoholic drinks. Many also serve food and host live entertainment or themed nights. Pubs, short for “public houses”, often have a cozy, community-centric atmosphere.
Breweries and Wineries
Breweries and wineries are facilities that produce beer and wine, respectively. Many open their doors to the public, offering tours of the production areas, tastings, and on-site restaurants or taprooms. They often showcase their unique products and production methods.
Spa & Wellness Centers
Spa and wellness centers offer services aimed at relaxation, health, and well-being. These include massages, facials, fitness programs, and other therapeutic treatments. Some are standalone, while others are part of hotels.
Travel Centers
Travel centers offer a variety of services to travelers, including a place to stay for the night, a restaurant, a gift shop, and a gas station. They generate revenue from services to travelers, like truck and auto services, showers, gas, food, and convenience items.
Conference Centers
Conference centers are large venues designed to host meetings, conventions, and exhibitions. They offer a range of facilities like meeting rooms, audiovisual equipment, and catering services. These venues are often used for business events, academic conferences, or trade shows.
Music Venues
Music venues are establishments or spaces where live music performances are held. They can range from intimate clubs to large concert halls or outdoor amphitheaters. These venues often provide food and drink services and host a variety of music genres.
Wedding Venues
Wedding venues are spaces specifically designed or frequently used to host wedding ceremonies and receptions. They can range from traditional ballrooms or banquet halls to unique settings like beaches, vineyards, or historic mansions.
Water Parks
Have you ever been to Waterworld, Raging Waters, Six Flags Hurricane Harbor, or any other waterpark in the US? If so, you know what a water park is. If not, they offer a variety of water-based activities for guests, including swimming, slides, and wave pools.
Museums
Museums are institutions that collect, preserve, and display artifacts or artworks for public education and enjoyment. They often host temporary exhibitions, educational programs, or events. Some museums also have on-site restaurants, cafes, or gift shops.
Casinos
Casinos are establishments where people can engage in gambling activities. They offer a variety of games like slots, poker, and roulette. Many casinos also feature entertainment options, restaurants, and accommodations, making them popular for both gaming and leisure
Golf Courses
You probably know what a golf course is, if not from hitting the links yourself, from seeing Caddyshack or Happy Gilmore. But for the uninitiated, a golf course is a course where people can play the sport of golf. It typically consists of a series of holes, each with a teeing ground, fairway, rough and other hazards, and a green with a flagstick and cup. Golf courses typically offer a variety of activities for guests, including golf, tennis, and swimming.
Amusement Facilities
Amusement Facilities are a type of hospitality property that includes businesses such as amusement parks, water parks, arcades, bowling alleys, and other recreational businesses. These facilities typically have high startup and operating costs, but they also generate a lot of revenue from ticket sales, beverage and food sales, and other disparate income sources like merchandise, season passes, etc.
Tourist Attractions
Tourist attractions are places of interest that draw visitors due to their cultural, historical, or natural significance. They can include landmarks, natural wonders, or theme parks. These attractions often have facilities like guided tours, souvenir shops, and dining options.
Theme Parks
Theme parks are family friendly recreational facilities offering activities such as rides, games, and performances. They provide fun experiences in a safe, controlled environment. Theme parks often have on-site dining options as well.
Cinemas and Theaters
Cinemas and theaters are venues where people go to watch movies, plays, or live performances. They provide entertainment in the form of visual and performing arts. Many cinemas and theaters offer concessions like popcorn and drinks, and some have luxury seating or dining services.
Nightclubs
Nightclubs are entertainment venues focused on music, dancing, and nightlife. They often have DJs or live performances, and serve alcoholic beverages. Nightclubs are known for their vibrant atmosphere, themed nights, and sometimes exclusive guest lists.
5 Types of Hotels
Hotels are the most common and widespread type of hospitality property. However, not all hotels are the same. Below we explore the 5 primary types of hotels:
Full-Service Hotels
Full-service hotels typically offer the most amenities, including on-site restaurants, room service, concierge service, fitness centers, and business centers. Although they offer the most amenities, they are also the most expensive type of hotel.
Select-Service Hotels
Select-service hotels are a step below full-service in terms of amenities and price. These properties typically have on-site restaurants and fitness centers but lack room service and concierge service.
Limited-Service Hotels
Limited-service hotels are the most basic type of hotel, offering little more than a room and a bed. These hospitality properties are typically the least expensive but also the least convenient.
Extended Stay Hotels
Extended stay hotels are designed for guests who need to stay for longer periods, offering kitchenettes and other conveniences not typically found in traditional hotels.
Budget Hotels
Budget hotels are the most affordable option but also the most basic. These properties typically have limited amenities and little to no on-site staff.
Hospitality Real Estate Market
How Big is the Hospitality Real Estate Market in USA?
The U.S. hospitality sector is a cornerstone of commercial real estate, with more than 117,000 hotel properties offering approximately 5.7 million guest rooms nationwide. Bolstered by resilient leisure travel demand, a surge in extended-stay development, and growing investor appetite for experiential lodging, the hotel industry continues to attract significant capital across luxury, boutique, and limited-service segments alike.
117 Thousand
Hotel Properties in USA 2026
5 Million
Guest Rooms in USA 2026
9 Ways to Invest in Hospitality Real Estate
Direct Ownership of a Hospitality Property
This method of rental property investing involves directly purchasing and owning a hospitality property, such as a hotel or resort. Investors benefit from both the property’s appreciation and the revenue generated from its operations. Direct ownership gives the investor full control over the property, from its management to its operational strategies.
Developing a Hospitality Property
This approach requires investors to identify land or a redevelopment opportunity and then build or renovate a hospitality asset. It’s a capital-intensive method but offers the potential for significant ROI, especially if the developer correctly anticipates market demand and manages the construction process efficiently.
BRRRR a Hospitality Property
The “Buy, Rehab, Rent, Refinance, Repeat” (BRRRR) strategy involves purchasing a hospitality asset, renovating it, renting it out to generate income, refinancing the property (typically to retrieve a substantial portion of the initial investment), and then repeating the process. This method leverages the increased value post-renovation, enabling investors to grow their portfolio without continuously injecting fresh capital.
Hospitality Real Estate Note Investing
Investors purchase debt secured by hospitality properties, making money from the interest on these loans. This method doesn’t involve direct ownership of the property but rather owning the loan. It’s a way to benefit from the hospitality industry’s growth without dealing with day-to-day operations or property management.
Hospitality Real Estate Companies
Several large hospitality real estate companies have redefined the dynamics of this asset class. Their size and influence not only shape market trends but also impact rental standards and practices nationwide. Investing in them, where possible, can be a great way to gain exposure to this asset class.
Turnkey Hospitality Real Estate
In turnkey investing, hospitality investors purchase fully operational properties that are already renovated, furnished, and in many cases, managed by a professional team. It’s a more passive form of investment, allowing individuals to benefit from the property’s rental income without getting involved in its initial setup or ongoing management.
Hospitality Triple Net (NNN) Investing
With NNN investments, the property owner (investor) typically isn’t responsible for any of the property’s operational expenses, like taxes, maintenance, or insurance. Instead, the tenant, usually a hotel operator or brand, covers these costs. This arrangement provides the investor with a more predictable income stream, often with fewer management responsibilities.
Hospitality Real Estate Syndication
This method involves pooling funds from multiple investors to acquire a hospitality asset. An experienced sponsor or management group typically oversees the property, while individual investors act as passive shareholders. Syndications allow individuals to invest in larger, potentially more profitable properties than they could afford on their own.
Hospitality Real Estate Stocks
Real Estate Investment Trusts (REITs) offer a way to invest in hospitality real estate without buying physical property. Instead, investors purchase shares in a trust or corporation that owns or finances hospitality assets. REIT investing provides liquidity, as they’re traded on major stock exchanges in addition to their frequent dividend distributions.
How to Buy a Hospitality Rental Property
Investing into the world of hospitality real estate provides investors with unique opportunities and challenges distinct from traditional real estate sectors. To be successful, buyers must grasp not only the property acquisition intricacies but also the nuances of hospitality service, branding, and management.
Hospitality Property Purchase Process
- Self Assessment & Investment Objectives: Begin by clarifying your financial capabilities, understanding of rental real estate finance, risk tolerance, and specific goals to ensure alignment with your intended hospitality property purchase.
- Assembling Your Hospitality and Real Estate Team: Assemble a diverse team of professionals, including hospitality consultants, a commercial broker with hospitality property experience, and legal advisors, to guide your acquisition process.
- Market and Location Analysis: Scrutinize potential markets and specific locations to identify trends, competition, and guest demand, ensuring the site aligns with your investment objectives.
- Key Characteristics of Successful Hospitality Properties: Focus on properties with optimal locations, unique value propositions, and sound infrastructure, which typically yield higher returns and guest satisfaction.
- Evaluating Financing Options for Acquiring Properties: Explore various financing avenues, such as commercial real estate loans, investors, or joint ventures, to determine the most advantageous funding structure.
- Making Offers and Negotiating Purchase Terms: After identifying a potential property, strategically present your offer and negotiate terms, keeping in mind both market conditions and your financial thresholds.
- Property Inspections, Appraisals, and Due Diligence: Ensure the property undergoes thorough inspections and appraisals, while also diligently verifying its legal and financial standing.
- Closing on the Property Purchase: Collaborate with your legal team to finalize documents, ensure all terms are met, and successfully acquire the hospitality asset.
Pro Tip
Purchasing a hospitality property can be challenging. An alternative way to invest without significant capital or hands-on involvement can be through online real estate investing platforms.
Managing and Branding Hospitality Properties
- Designing and Furnishing the Property: Craft interiors that resonate with your target audience, prioritizing both aesthetics and functionality to enhance guest experiences.
- Creating a Strong Brand or Franchising a Brand: Develop a unique brand identity for your property, or consider aligning with an established franchise to boost credibility and recognition.
- Delivering Superior Guest Services: Emphasize training and consistent service delivery to ensure guest satisfaction, driving repeat business and positive reviews.
- Property Maintenance and Renovations: Regularly maintain and update the property to keep it in peak condition, ensuring guest comfort and adherence to industry standards.
Marketing and Revenue Management for Hospitality Properties
- Creating a Comprehensive Marketing Strategy: Develop a robust marketing plan encompassing digital, social, and traditional channels to effectively reach and attract your target demographic.
- Implementing Pricing and Revenue Management Strategies: Leverage hospitality software and data-driven pricing strategies to optimize occupancy rates and revenue, adapting to market fluctuations and seasonal trends.
- Building Partnerships with Local Businesses and Tourism Boards: Collaborate with local entities to enhance guest experiences and tap into wider marketing and promotional opportunities.
Financial Management and Performance Analysis
- Understanding Revenue Streams, Operating Costs, and Cash Flow: Maintain a detailed financial overview, monitoring diverse revenue streams, operational costs, and ensuring positive cash flow.
- Assessing Return on Investment: Regularly analyze financial performance against your initial investment to gauge ROI and inform future decision-making.
- Tax Considerations and Benefits: Familiarize yourself with specific tax implications and advantages within the hospitality sector to optimize your financial strategy.
Scaling and Diversification in Hospitality Property Investing
- Strategies for Growing Your Hospitality Portfolio: Explore new developments or potential acquisitions to expand your portfolio, leveraging insights from existing properties to guide expansion.
- Diversifying Your Portfolio with Different Types of Hospitality Properties: Invest in varied hospitality assets, from boutique hotels to resorts, to hedge against market volatility and capitalize on diverse revenue streams.
- Exit Strategies: Understand when to exit an investment, whether through a sale, refinancing, or transitioning the business, to optimize returns and safeguard your portfolio.
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Top Hospitality Real Estate Investor Tools
Hospitality Real Estate Investing Calculators
Hospitality Real Estate Insurance
Hospitality properties face round-the-clock risks, from guest injury and liquor liability claims to fire, storm damage, and the lost revenue that follows when rooms sit empty. The right commercial property insurance protects your buildings, your liability exposure, and your income, whether you own a hotel or water park. Smart hospitality investors secure specialized coverage so a single claim never threatens the returns they have worked hard to build.
Hospitality Real Estate Loans
Financing a hospitality property works differently than a typical home loan, with lenders weighing factors like occupancy rates, annual revenue, and operator experience. The right commercial real estate loan can fund a boutique hotel or a wedding venue, to acquire, refinance, or renovate. Smart hospitality investors compare banks, SBA programs, CMBS, and private lenders to secure the rates and terms that keep a deal profitable.
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Frequently Asked Questions About Hospitality Real Estate Investing
What are the Pros and Cons of Investing in Hospitality Real Estate?
There are many factors to consider when determining whether or not to invest in hospitality rental properties. The following is a comprehensive list of the pros and cons you need to know before investing in hospitality rental properties.
Pros of Hospitality Property Investing
- Strong Demand – There is always going to be a demand for accommodation, whether it’s for business or leisure travel. This means that your property is likely to be occupied most of the time, generating a healthy return on investment.
- High Standards – Hospitality properties are held to high standards, so you can be sure that your investment will be well-maintained. Well run hospitality properties usually translate into happier guests and greater profits.
- Professional Management – Hospitality properties are managed by experienced professionals who know how to maximize revenue and keep guests happy. This means that you can relax and leave the running of your property in safe hands.
Cons of Hospitality Property Investing
- Cyclical Industry – The hospitality industry is notoriously cyclical, and properties can lose significant revenue during down cycles. Factors such as weather, global events, and consumer preference can all affect a hospitality property’s favorability.
- High Entry and Operating Costs – Hospitality properties are often very expensive to purchase and maintain. High operating costs coupled with an unplanned down-cycle, and the property can be a drain on financial resources.
- Highly Competitive – The hospitality industry is highly competitive, with no guarantee that a particular property will be successful. One-upping competitor amenities, discounting prices, and marketing campaigns are all tools used by hospitality properties to gain advantages over competitors.
Are Short Term Vacation Rentals Considered Hospitality Properties?
Short term vacation rentals are generally categorized as residential properties by the IRS, but they can also qualify as active businesses depending on the level of services provided and the frequency of rentals. If a vacation rental meets certain criteria, such as providing substantial services or being rented out for a significant portion of the year, it may be considered a hospitality property for tax and business purposes.
Hospitality Real Estate vs Other Rental Real Estate Asset Classes
Hospitality real estate offers a unique blend of challenges and opportunities, when compared to other rental asset classes. As an investor, understanding these distinctions beforehand, can greatly improve the odds of investment success.
| Criteria | Hospitality Real Estate | Multifamily | Student Housing | Senior Living |
|---|---|---|---|---|
| Scale of Investing | High (dependent on location and property type) | Moderate to High | Moderate | High due to specialized facilities |
| Management Intensity | Very High (daily operations, guest services) | Moderate (tenant management) | High (semester rotations, facility management) | Very High (healthcare services, daily needs) |
| Liquidity | Lower (depends on market conditions) | Moderate | Moderate | Moderate to High |
| Risk Profile | Moderate to High (subject to tourism and economic factors) | Moderate (stable demand) | Low to Moderate (consistent academic year demand) | Low (aging population increases demand) |
| Potential ROI | High (with successful management and location) | Moderate to High | Moderate | Moderate to High |
| Tenant Duration | Short-term (days to weeks) | Long-term (months to years) | Seasonal (academic year) | Long-term (years) |
| Market Sensitivity | High (affected by economic, political, and environmental factors) | Moderate (driven by demand for apartments) | Moderate (tied to academic enrollment) | Low to Moderate (dependent on demographic shifts) |
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About the Author
Ryan Nelson
I’m an investor, real estate developer, and property manager with hands-on experience in all types of real estate from single family homes up to hundreds of thousands of square feet of commercial real estate. RentalRealEstate is my mission to create the ultimate real estate investor platform for expert resources, reviews and tools. Learn more about my story.
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