Lodging/Resorts REITs own, operate or finance lodging properties such as hotels, resorts and vacation rentals. These REITs generate income primarily by leasing their properties to hotel operators, who in turn offer travelers the opportunity to travel for leisure or business. These REITs typically hold a diversified portfolio of high-quality housing properties located in popular tourist destinations and major cities.
Lodging/Resorts REITs offer investors exposure to the hospitality sector without the need to directly own and manage properties; And the hospitality industry benefits from economic growth and increased consumer spending.
Lodging/Resorts is the second-best performing REIT sector based on total returns, with a return of 5.6% on a year-to-date basis through the end of March. According to STR data, RevPAR (revenue per available room) for the hotel industry increased 4.9%; ADR (average daily rate) increased 4.3%; And occupancy increased by 0.6% in 2023.
Over the same period, the sector reported $6.2 billion in FFO and paid out $1.6 billion in dividends, up from $5.9 billion and $650 million respectively in 2022. More details on the financial performance of Lodging/Resorts REITs can be found in Nareit’s t tracker,
- 5.6%: Rates of return for lodging/resort REITs as of end-March
- 4.9%: Increase in RevPAR for Hotel Industry
- 4.3%: Increase in ADR for hotel industry
