That comes on the heels of a robust 2014, when global hotel transaction volume reached nearly US$60 billion, a 10 percent increase over the year before. Private equity investors are fully loaded and under pressure to invest funds. Asian money, driven by outbound Chinese capital, is growing rapidly due in part to increased activity from insurance companies.

The confidence that investors and lenders have in global hotel market performance is expected to remain strong in 2015, with the year representing the highest transaction volume in eight years, as investors are ready to chase after top hotel deals.

As in recent years, the Americas region is expected to drive global transaction volume with a projection of US$34.5 billion in transactions. In the US, investors are disposing of assets purchased at the onset of the recovery cycle and taking capital gains. Momentum is further fueled by the weight of private equity pursuing portfolio deals.

Europe, the Middle East and Africa (EMEA) will continue its forward stride with a projected US$24.7 billion in hotel trades in 2015. The bulk of its sales activity will be driven by large single-asset transactions, led by London and Paris, while portfolio deals are anticipated in the UK and Germany. Outbound capital from the Middle East is anticipated to remain strong.

Asia Pacific is expected to bring a steady growth of 13 percent, lifting deal volume to US$8.5 billion. Japan will be the standout in the region, led by increased debt and investor confidence in hotel performance growth. Australia is expected to remain an active market as well since a stable government and rise in tourism and investment interest from China will make it a continued safe haven for moderate growth.

Two distinct investment models are contributing to a dual-faceted hotel investment market. Private equity investors and discretionary investors are charged by different drivers, which will shape the state of play and acquisition victories in 2015.

Private equity funds are flush with cash and have a need to deploy capital, motivating them to push forward with deals. After all, for those targeting the sector, real estate investment is their core business. For funds raised at the onset of the recovery cycle, there will be increasing pressure for the money to be placed during the funds’ investment horizon. Private equity players will aim to time the market right, deploy capital quickly, and find meaningful yield in their three to five-year investment window.

Global funds and private equity groups based in the US and Western Europe will lead the charge here, with the US, UK and Germany as the biggest destinations for private equity capital. Private equity investors will also look to higher yielding markets such as southern and emerging Europe, as well as resorts and secondary and tertiary locations in the US. In Asia, private equity plays will remain limited to core markets.

Discretionary investors, on the other hand, have fewer deployment requirements or market timing pressure. This group includes sovereign wealth funds, institutions, developers and high net-worth investors who will deploy capital only if they are attracted to a property and a deal. These investors are expected to continue to concentrate on primary markets in 2015.

Hold periods for discretionary investors are typically 10 years or more, so they are less bound by market timing in terms of selling an asset at the next peak. In markets where the perception is that hotels are getting increasingly pricey, discretionary investors will wait for the right deal to strike.

In terms of outbound capital, Asia, the Middle East and the US will continue to be the major exporters in 2015 with the intensity and momentum of these players notching up. Three main trends are expected to take shape the year:

• Floodgates opening for Chinese outbound capital: Asian money will feature more strongly, especially driven by Chinese capital, which is growing by leaps and bounds. Insurance companies have emerged as a new capital source from within the country. They have helped grow the swell of outbound capital from several hundred million dollars annually during the past several years to nearly US$1 billion in 2014. Global cities with direct flight connections to China are high on investors’ wish lists.

• Middle Eastern capital to remain strong: Outbound capital from the Middle East, which has been active, remains strong and is expected to continue at a high volume and steady pace.

• North American private equity funds have cash to deploy: These funds need to deploy capital in the short term. European yields remain some of the most attractive, with US investors looking further afield as prices continue to rise on home soil.

Globally, single assets will drive more than two-thirds of deals in 2015. This shows just how favorable the market is getting — the volume of single-asset transactions in 2015 is expected to eclipse the peak levels seen in 2007 of around US$40 billion. This marks a difference from 2007, when portfolio acquisitions accounted for three quarters of global buys, showing that the mega-deals of the peak years are seen more as outliers than a cyclical trend.

Markets which will see portfolio deals in 2015, including some over the US$1 billion mark, are the US, Western Europe and Japan. In the US, these transactions will consist of branded mid-market hotels whereas in Europe some will include full service hotels as well. In Japan, the lion’s share of transactions will be comprised of portfolio sales.

Revenue per available room (RevPAR) is projected to grow by 5 to 8 percent globally in 2015, notwithstanding regional variances. In the Americas, pockets of particularly strong growth will include the US, driven by healthy demand fundamentals and low new supply.

Many European countries have reached their occupancy ceiling. Thus, average rates will be the key driver of RevPAR moving forward, boding well for hotel profit increases. The Middle East is expected to see growth as well, and hotels in Africa will at times experience double-digit RevPAR growth. Growth is expected to be a bit more moderate in Asia: up in Japan and Indonesia, slowing in China — with the exception of Shanghai, where a significant risk of oversupply in the higher tiers of hotels does not exist — and largely stable in India.