Hospitality’s post-COVID boom: where experiences, capital and global wealth converge

In leisure and hospitality, the post-COVID uplift could be set to continue. Everything experiential is booming. Hotels with specialist offerings – from spa/wellness retreats and superior F&B offerings to boutique party hotels and limited-service options – are thriving. Saydam Salaheddin, Deutsche Bank Private Bank’s Global Head of Real Estate Lending, explores the fundamentals behind this resurgence and why the hospitality sector looks poised for long-term growth.

More than four years after the global shutdown of travel, the hospitality industry appears to have recovered and entered a new phase of structural growth. This post‑COVID boom reflects a fundamental shift in how, why and where people travel, with experiences, emotional value and emerging market demand reshaping the sector’s economics.

Following strong growth in 2024, momentum in the hospitality sector continued throughout 2025. Data from UN Tourism shows that international tourist arrivals increased by four per cent during the course of the year, reaching an estimated 1.52 billion visitors – almost 60 million more than the previous year, surpassing pre-pandemic levels[1].

Fast‑growing visitor spending is providing a powerful tailwind for hotels and destination economies alike, with global tourism revenues reaching a record 2.2 trillion US dollars in 2025, according to estimates.

A resurgence in hospitality spending

At the heart of this resurgence lies the rapid expansion of experiential travel. After prolonged lockdowns during the pandemic years, travellers have since showed signs of prioritising memorable, immersive experiences over material consumption. This has translated into strong demand for hotels that offer more than traditional accommodation, including destination dining, wellness concepts, live events and highly differentiated social spaces.

This experience‑led shift is visible across multiple hotel sub‑segments. Boutique party hotels, vineyard chateaux spas, ultra‑luxury lifestyle brands and even no‑service or highly automated “capsule or pod” properties are all benefiting, each appealing to specific travel “mindsets” rather than traditional star ratings.

Industry analysis from JLL and RLA Global highlights how this diversification has helped hotels outperform other commercial real estate classes on revenue per available room (RevPAR) and average daily rates since the pandemic. In many markets, hotel pricing power now materially exceeds pre‑COVID levels, particularly at the premium and lifestyle end of the spectrum[2].

A sector of interest

Capital markets have taken note. Hotels have re‑emerged as a desirable sector for lenders and investors, supported by faster inflation pass‑through than office or retail assets. Deutsche Bank, for example, has previously highlighted renewed confidence in hotel lending, backed by strong fundamentals and investor demand for hotel‑backed debt[3]. Recent financing activity – including Deutsche Bank‑led lending for major hospitality acquisitions – reflects a broader resurgence of the sector as travel demand normalises and global mobility expands.

A further pillar of the post‑COVID hospitality boom is the rapid growth of travellers from emerging and developing markets. Rising incomes, a growing middle class and improved air connectivity across Asia, the Middle East and parts of Latin America are reshaping global travel flows. Indeed, leisure travel spending could rise from $5 trillion in 2024 to $15 trillion by 2040[4], with much of that growth driven by emerging economies seeking both domestic and international experiences, according to estimates from Boston Consulting Group.

What this could mean for borrowers

For borrowers, the post‑COVID structural upswing in hospitality is translating into improving credit fundamentals and renewed lender appetite, particularly for well‑located, experience‑led assets. Stronger cashflows, higher RevPAR and faster inflation pass‑through have increased refinancing options and pricing power, while lenders are showing greater flexibility around leverage and tenor for assets with clear experiential differentiation and proven demand resilience.

At the same time, credit is increasingly selective rather than indiscriminate. Borrowers may be rewarded for operational quality, brand strength and capex discipline, while undifferentiated or structurally challenged assets face tighter underwriting, higher equity requirements and a sharper focus on business plans. For high‑quality sponsors, however, the current environment offers an opportunity to refinance from a position of strength and fund growth against assets that lenders increasingly view as core rather than cyclical.

Nevertheless, while sector fundamentals have strengthened, risks remain. Higher interest rates, rising operating costs and uneven demand across geographies mean performance dispersion is increasing, with outcomes highly dependent on asset quality and execution. Borrowers with differentiated offerings, disciplined capital investment and clear paths to cash‑flow resilience are best positioned to navigate potential volatility, while weaker or undifferentiated assets remain more exposed to refinancing and valuation risk.

Looking ahead, the post‑COVID boom in hospitality appears durable rather than cyclical. While growth rates may moderate from the initial rebound, structural drivers – experience‑led consumption, capital rotation into hotels and the rise of new global travellers – continue to underpin demand. For operators able to differentiate their offering and for investors willing to back well‑located, experience‑rich assets, hospitality is increasingly positioned not as a recovery story, but as a long‑term growth sector in a reshaped global economy.