“The launch of W Hotels in 1998 was a major inflection point and led to more groups embracing the lifestyle hotel concept. Activity spiked in the 2010s as large chains noticed materially higher growth in the category,” reads CBRE’s 23-page report, released May 28.
Singapore and Hong Kong have the highest lifestyle hotel penetration rates in the Asia Pacific, as hotel owners in these markets are generally more willing to take on new brands. Meanwhile, penetration rates in mainland China, India and Japan are low as these markets are dominated by local hotel groups, according to CBRE.
The economics of lifestyle brands are extremely compelling, adds CBRE. “Asia Pacific total hotel supply has a 10-year CAGR (2015-2025) of around 5%, with that for lifestyle hotels almost four times greater at 19%.”
Although Gen Z is the largest demographic cohort in Asia Pacific, its current spending lags that of older generations as they are either still studying or only just beginning their career. This is set to grow as Gen Z’s spending power increases.
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According to CBRE Research, revenue per available room (RevPAR) for lifestyle hotels outperforms the overall market. While the premium for luxury hotels is only 2%, the upscale (7%) and upper upscale (13%) lifestyle segments are showing stronger performance. CBRE Research’s lifestyle hotel performance data includes more than 600 existing hotels from over 40 brands.
“With fewer lifestyle brands present in the upper midscale and below categories, this presents an opportunity for brands to expand. Hotels in these chain scales are also more attractive for Gen Z due to their lower price point,” says CBRE.
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Small transactions, big opportunities
Hotel investment volume in the Asia Pacific exceeded pre-pandemic levels in 2024 and continued to increase in 2025, notes CBRE.
Most transactions during this period involved smaller deal sizes. In 2020, only 31% of total hotel investment volume was under US$100 million. This ratio grew to 39% in 2024 and further increased to 42% in 2025.
Around 30% of assets traded during this period were independent hotels. Given proper redesign and renovation, CBRE believes these smaller, independent assets can provide value-add as opportunities for conversion to lifestyle brands.
While new builds are still preferred for creating unique and contemporary lifestyle designs, rising construction costs are directing investors’ focus to conversions, says CBRE.
Conversions typically involve two main approaches. The first of these is joining through soft brands, which are a collection of independent hotels under a larger hotel group, says CBRE.
“This concept provides existing independent hotels access to global distribution channels and loyalty programmes without changing their design.”
The second approach is physical conversions through core lifestyle brands. “Contrary to soft brands, core brands usually come with a brand design theme,” notes CBRE. “This involves more design requirements, which need more capex than soft brands. However, working with core brands creates a stronger bond and allows the hotel to leverage established brand loyalty.”
