Scarcity. It’s the oldest driver of value there is, and right now it’s working squarely in favor of ultra-luxury hotels. Global wealth has compounded at 9.6 percent a year since 2015, according to UBS data reviewed by JLL Research. Ultra-luxury hotel supply has grown at just 2.3 percent.
In 2025 alone, 287 new billionaires added $684 billion in wealth, more than nine times the $75 billion created in 2022. The entry threshold for Forbes’ annual list of the 400 wealthiest Americans rose from $2.1 billion in 2020 to $3.8 billion in 2025. The result? Roughly 500 U.S. billionaires left off the list. When the list was first published in 1982, it included just 13 billionaires.
Americans 70 and older now hold more than $60 trillion in net worth, according to the Federal Reserve. This wealth concentration comes at a moment when this cohort is living longer, having more active lives and can afford to put a premium on their time.
Resonance’s Future of Luxury Travel report puts spending at $7,900 per trip for the top 10 percent of income brackets and $12,400 for the top 1 percent. Luxury travel spending is expected to reach $544 billion in 2026, a 23 percent increase over 2023 levels.
Affluent Households Carry Travel Demand
The top 20 percent of U.S. households spent $2.5 trillion on discretionary items in 2024—close behind the $2.9 trillion spent by the middle 60 percent combined, according to Tourism Economics analysis of BLS and Census data.
For lodging, concentration is more pronounced. Households earning $200,000 or more represent just 11 percent of all households but generate 36 percent of leisure lodging spending, up from 25 percent in 2018. That 11-percentage-point shift in eight years represents a fundamental reordering of who drives hotel demand.
Experiences are winning the wallet, too. McKinsey’s 2025 “State of Luxury” report found that approximately 80 percent of high-net-worth individuals plan to redirect spending from luxury goods to experiences. Affluent consumers value time above all, and they’re willing to pay premium rates for memorable experiences.
Supply Growth Stalls as Demand Accelerates
Construction can’t keep pace. Luxury travel spending is expected to reach $544 billion in 2026, a 23 percent increase over 2023 levels. The constraint is tightening: U.S. luxury supply is forecast to grow at just 0.8 percent annually through 2028, well below the long-term average for all hotels of 1.6 percent.
New development won’t close the gap. Hotels are trading at a 51 percent discount to replacement cost, meaning it’s twice as expensive to build as to buy, according to JLL’s H1 2026 U.S. Hotel Investment Trends Report. Elevated construction costs and high barriers to entry in prime locations explain much of the gap. When demand compounds at 9.6 percent and supply at less than one percent, the math creates sustained pricing power.
Performance Reflects the Imbalance
Ultra-luxury hotels with ADRs above $1,000 achieved RevPAR of $909 on a $1,439 ADR through August 2026, according to JLL Research analysis of 47 U.S. properties tracked by STR/CoStar. That is 160 percent of 2019 RevPAR, against 133 percent for broader luxury.
ADR has compounded at 11.5 percent a year from 2019 through spring of 2026, compared with 5.6 percent for CPI and 6.0 percent for broader luxury. Globally, 59 hotels now command ADRs above $3,000—a threshold no property crossed in 2019.
Capital is Returning
Transaction activity confirms renewed investor confidence. Luxury transactions historically move in 18-to-36-month cycles, and the surge in late 2025 signals the start of a new upcycle. Notable 2026 trades include Grand Lakes Orlando at $1.38 billion for 1,592 keys, JW Marriott Marco Island at $835 million and Four Seasons Resort Orlando at Disney World at $765 million.
High-net-worth individuals now represent 16 percent of luxury acquisitions at $1 million+ per key since 2021—up from just 1.6 percent in 2015—with private equity taking 41 percent and REITs 23 percent. Only 19 transactions since 2010 have exceeded $2 million per key. Average luxury cap rates are tightening again, despite the recent movement in treasuries and interest rates. Several luxury transactions are expected to close in the 5% to 6.5% range in 2026, providing evidence of sustained pricing strength despite rising inflation and interest rates.
What This Means
For operators, guests with the means to pay are focused on true luxury, and they’re willing to pay exponentially more for experiences that justify premium pricing. The 59 hotels worldwide now commanding ADRs above $3,000 (up from zero in 2019) didn’t stumble into that position. They provided service levels, programming and exclusivity that have separated them from conventional luxury. Properties that can make that leap will capture rate growth that compounds at twice the pace of inflation.
For investors, the fundamentals align: RevPAR is outperforming, the construction pipeline is below 20-year averages, dry powder is abundant and hotels offer compelling relative value versus certain other commercial real estate segments. When wealth is growing at 9.6 percent annually and supply at 2.3 percent, scarcity creates pricing power that persists across economic cycles.
The math is straightforward: wealth expansion is outpacing ultra-luxury supply by roughly four to one. For those positioned to deliver—or acquire—assets that serve the top of the market, the window to generate outsized returns is open.
Story contributed by Dan Peek, president, Americas, JLL’s Hotels & Hospitality Group, and Christine Bang, manager, JLL Hotel Capital Markets Research.