By Blake Friesen

Overseas capital accounted for 41.2% of the global hotel investments in the 12-month period ended Oct. 31, 2014, up from 34.7% in 2013 and 29.9% in 2012.  Asian investors, notably China, Hong Kong, Japan and Singapore, accounted for 43.2% of the cross-border hotel transactions during fiscal 2014.  They prefer financing mature markets, with New York City, Hawaii and London representing 48.5% of total Asian hotel investment globally.

China, chiefly represented by state-owned enterprises and large-scale developers, was very active in 2014, making some blockbuster acquisitions. During the year, Anbang Insurance Group, a Chinese insurance company, splashed $1.95-billion on the Waldorf Astoria in Manhattan on Park Avenue.  It is the most expensive hotel purchase to date in the U.S.  The savvy seller of the property, Hilton Worldwide Holdings Inc., received a sweetener in the deal that allows it to continue managing the hotel, and collect fees, for the next 100 years.

There are no signs that Chinese investment overseas will slow down this year.  Considering the geopolitical environment in Asia and the perceived stability in Western countries, as well as increasing outbound China tourism, the wealthy Chinese will continue to park their dollars in overseas investments.  China has already made headlines for spending billions in New York and London, and analysts now anticipate the big deals will expand to Sydney. The Australian capital is already beginning to experience activity, with Chinese investors taking note of a growing Chinese population and visitation levels, favourable tax regime, weakening currency versus the Chinese renminbi, and higher yields compared with the U.S. and Europe.  The large American hotel companies, meanwhile, have all set their sights on expansion in China.