Investors are exploring the world for new opportunities.

According to Jones Lang LaSalle Hotels, U.S. investors are set to invest capital into Asia in the coming years as investment into the hotel sector continues to undergo rapid globalization.

U.S.-based investors are expected to continue to dominate the market and explore the world for new opportunities.

Last year saw a record 64% ($30 billion) of the total volume of global hotel investment coming from the US, followed by the UK with 10% ($4.8 billion) and investors from France totaling 4.8% ($2.2bn) according to Jones Lang LaSalle Hotels' Hotel Investment Outlook report.

"The total transaction market for 2005 exceeded all expectations, 63.5% up on the previous year at a total value of $45.2 billion," said Arthur de Haast, global CEO for Jones Lang LaSalle Hotels.

"We have seen inter-regional investment gain momentum in the last couple of years, especially from U.S. investors with 33.6% of their hotel acquisitions in Europe and 33.9% in the Asia Pacific region.

"We expect this trend to gather pace in 2006 with US investors at the helm of the march into China and Japan."

He added, "The other development which shows no sign of abating is the dominance of private equity firms, which thrive on the risk return profile of international transactions and hotels as an asset class.

"Consequently the hotel investment landscape is being altered dramatically." Only two years ago, the bulk of hotels were held by corporate entities, which owned the property assets and managed the operation.

Today, most international hotel operators are separating management and ownership--selling off property assets whilst securing long-term leases or management contracts which protect their brand and provide an ongoing secure income stream through management fees.

"In the U.S., Starwood Hotels and Resorts sold more than $500 million worth of hotels in 2005 and later in the year contracted to sell a $4 billion portfolio to publicly-traded REIT Host Marriott," said Arthur Adler, managing director and CEO-Americas for Jones Lang LaSalle Hotels.

"Starwood has said it wants to transform itself into a lifestyle company built around a branded hotel portfolio.

"It too has followed the trend whereby it sees little need to own the building in which it operates hotels."

As global hotel operators free up capital, they may find that the new ownership regime is more demanding.

The new breed of opportunistic investors have reduced the traditional investment period from the long term to two to four years with some aggressive investors looking to exit their assets in as little as 18 to 24 months.

To achieve their desired returns within these shorter holding periods, owners have adopted high impact asset management strategies that do not always reconcile with the operator's strategy to build long term brand loyalty.

"Operators are now looking acquisitively to grow their businesses internationally because they struggle to achieve organic growth," said de Haast.

"This could trigger an industry shake-up with those that survive bearing the strongest brands, management teams and financial discipline."