In 2025, boutique ultra-luxury hotels had a banner year: valuations reached all-time highs, ADR and occupancy both rose, and this segment made money while nearly every other part of the market was bleeding out.

Some owners fully capitalized on that reality and moved decisively. Others hesitated, not because their business was weak, but because many owners of hotels like these are artists as much as they are businesspeople, and artists tend to be … well, messy. Family dynamics were unresolved. Succession questions lingered. Some waited for children to be ready, relationships to settle, or just one more season to feel complete. The irony is that the owners who tried to settle the mess before acting lost ground, while the ones who pushed through it, despite the noise and the discomfort, ended up with the biggest rewards the market was offering.

The owners who came out ahead understood one practical idea. A transaction didn’t have to mean selling everything, giving up control, or closing a chapter permanently. It could mean taking money off the table, choosing the right partner, and creating room to breathe. That understanding shaped the outcomes that actually got done.

Many of the strongest transactions we completed this year were intentionally partial, including minority sales and toe-hold deals that brought in aligned partners without stripping owners of control, identity, or upside. These structures gave owners liquidity while allowing them to stay deeply involved in their businesses, and they created room to think clearly, handle family conversations, and decide next steps without pressure. Owners who embraced that approach acted with the situation they had, not the situation they wished for, and that choice paid off.

The owners who hesitated tended to get stuck in the same loops. Family alignment felt like something that needed to come first, even though family dynamics often improve once financial uncertainty is reduced. Succession planning stayed abstract because no one wanted to be the first to force the issue. One more season felt emotionally necessary even when it didn’t change valuation, pricing power, or the owner’s position in the market. None of that made those owners unsophisticated. It made them human.

What changed meaningfully in this segment is the kind of investors and allocators that decided to play here. Family offices showed up with larger and larger checks, chasing valuations that were soaring. Entire new allocator classes moved into ultra-luxury boutique hospitality. Private equity extended its horizons of time to participate. Even REITs began deploying capital into assets they would’ve dismissed outright not long ago. All of these investor classes shared the same problem. There weren’t enough sub-100-key ultra-luxury hospitality assets available to buy.

When investors can’t buy, they build, which is why our largest transactions this year were for new construction. Deals that began as $40 million conversations turned into quarter-billion-dollar greenfield allocations. Projects that would’ve been laughed out of an investment committee a few years ago are now fully funded. Greenfield is on fire because demand has nowhere else to go.

That shift matters for owners of operating hotels. Investors that once relied on buying existing assets now have a growing menu of greenfield options with clean governance, full control, and no inherited complexity. Great operating hotels remain valuable and highly desirable, but scarcity alone no longer guarantees leverage. Owners who assume buyers will always be waiting may find that attention moves elsewhere while they’re still trying to get everything perfectly lined up.

Looking ahead, 2026 is shaping up as another defining year for this segment. The broader hotel market is staring down a difficult first quarter, but boutique ultra-luxury continues to separate itself on performance, pricing power, and investor interest. 2026 won’t be kind to hesitation, but it will be generous to owners who understand they’re no longer competing only with other hotels; they’re competing with greenfield projects that can move faster, more cleanly, and without the mess.