ABSTRACT
Hotels are at another spectrum of the real estate asset class as they are as much an operating business as they are a real estate asset. One unique aspect of hotels is the tenor of the leases for the rooms available, i.e. generally a single day. Therefore hotels are the real estate asset with the greatest sensitivity to economic cycles, as they tend to be a leading indicator for economic performance. Hotels can reprice their leases on a daily basis as opposed to a multifamily product that has year-long leases or commercial/industrial office and retail assets that can have leases that extend decades, e.g. ground leases. As such, this can make hotel assets the best protection against inflationary concerns but also the most sensitive to changes in inflation.
