Any of them if purchased at the right price and managed appropriately.
Which type of hotels can yield good returns to high net worth investors?
When it comes to hotel investments options, are full-service hotels or select service hotels more beneficial to invest in? If I am looking at second tier markets like Minneapolis or Indianapolis, which type of hotel would bring me better returns? Why?
I think limited-service hotels in solid locations in second-tier cities do really well. However, location is very important because when going into a slight downturn in the economy, these type of hotels are more sought after due to strong amenities, newer rooms, better price points, etc.
It really depends on what type of brand hotel you are looking for and most importantly, the length of investment (i.e. 3, 5, 10 to exit, etc.). If you are looking in second tier markets, you can have a good return subject to the pin point location and the market you are catering for. Most importantly, we have seen full-service hotels in second tiers have more value in terms of returns.
Very hard to generalize. I would generally say urban-full service hotels of quality in areas with high barriers to entry will do best if well managed with good service and reservation systems.