Many publicly traded brand hotel companies, which historically owned and operated property, continue to dispose of owned real estate assets while focusing on growing more predictable management and/or franchise fee income, as well as expanding their distribution networks and overall critical mass. Many publicly traded pure hotel investment firms continue to acquire assets while also pruning their portfolios and disposing of non-core assets and/or selling hotel properties where they are able to "bake in" recent rapid appreciation gains.

In addition, private equity firms, taking advantage of continued inexpensive debt, have utilized high levels of leverage to continue to be major acquirers of corporate hotel enterprises and large portfolios of hotels. Furthermore, with institutional investors under pressure to "get money out," coupled with the significant amount of foreign capital flowing in to the US from all parts of the world, investment in the domestic lodging industry is anticipated to provide superior risk adjusted returns when compared to other investment options.

Given that the outlook for the US lodging industry remains positive with profits anticipated to continue to grow to record levels, capital, both debt and equity, will continue to robustly flow into the sector. Rising cash flows through both market factors (i.e.: ADRs increasing above underlying inflation levels), and ever more sophisticated asset management techniques should more than offset anticipated modest increases in capitalization rates which cannot compress much further.