Boutique Hotels Are Booming: Why Capital Markets Are Doubling Down on Independent Assets

Insights from Jillian Mariutti, Senior Director, Capital Markets at JLL

In today’s rapidly evolving investment landscape, boutique and independent hotels are not just holding their own—they’re outperforming. According to Jillian Mariutti, Senior Director on JLL’s Hotels & Hospitality team and a longtime supporter of BLLA, boutique hotels are experiencing a capital markets renaissance driven by major shifts in consumer behavior and investor priorities.

“Independent hotels are experiencing a liquidity boom, outpacing their branded counterparts in the post-pandemic era,” said Mariutti. “From the 2014–2019 period to the 2021–2024 post-pandemic era, independent hotels saw a remarkable 55% increase in liquidity, dwarfing the 3% growth of branded hotels.”

This data reveals a powerful narrative: investors are increasingly placing their capital where flexibility, authenticity, and experience converge. As consumer preferences evolve, boutique hotels are emerging as the ideal asset class to meet demand.

“Boutique and independent properties, with their flexible, experience-driven spaces, are uniquely positioned to cater to the modern traveler’s blended lifestyle of work, living, and leisure,” said Mariutti. “Their adaptability has caught the eye of capital markets, making them increasingly attractive investment targets.”

Lender Sentiment Is Shifting—In Your Favor

For boutique hotel owners seeking capital, the tide is turning. The financing environment in 2024 and early 2025 has improved significantly, and that momentum is expected to continue.

“Hotel debt liquidity has improved meaningfully, with compressed spreads and more lenders entering the space,” said Mariutti. “There’s renewed optimism in hotel lending. All lender types continue to be active and quoting on deals, with some increased scrutiny for sponsorship and credit quality.”

One major catalyst for the anticipated uptick in transactions? A looming wall of maturities.

“There are $145 billion in hotel loan maturities slated for 2025 and 2026, which is expected to catalyze hotel transactions,” she explained.

What Today’s Lenders Are Looking For

For hoteliers eyeing a refinance or recapitalization, understanding lender expectations is key. Mariutti outlined four primary focus areas in today’s environment:

• Loan-to-Value Ratios: “Typical deals are around 60–65% LTV,” she said.
  
• Cash Flow & Market Conditions: These remain core underwriting metrics.
  
• Sponsorship Quality: “Lenders are scrutinizing sponsorship quality and credit,” she emphasized.
  
• Capital Stack Creativity: “The ability to structure deals with mezzanine debt or preferred equity is often necessary to close the gap.”
  

Interest Rates and the Return of Flexibility

Despite recent volatility, the overall interest rate environment is becoming more favorable for boutique hoteliers looking to finance deals.

“All-in interest rates—comprising the index (SOFR) and credit spreads—have seen recent volatility,” Mariutti said. “SOFR is down 100bps since the easing cycle began last year, and credit spreads have also compressed.”

This means debt is not only more accessible but more attractive than it was even 12 months ago.

“While the market is still volatile, all-in rates are significantly lower than where we were 12 or 18 months ago. This is accretive to the financing markets,” she noted.

That said, macroeconomic shifts—such as changing travel patterns—continue to influence underwriting.

“Independent hotels are more exposed to these shifts, so lenders are paying close attention to performance projections and market dynamics,” she added.

The Boutique Hotel Investment Conference: Where the Right Conversations Happen

As a proud BLLA vendor partner and industry leader, JLL understands the value of relationships and real-time insight. That’s why Jillian Mariutti encourages boutique hoteliers and investors to attend the 2025 Boutique Hotel Investment Conference in New York City.

“The Boutique Hotel Investment Conference is the premier event for boutique hoteliers and investors to navigate today’s capital markets,” she said. “It offers unparalleled access to cutting-edge insights and networking opportunities in the luxury independent and lifestyle hotel sector.”

“This conference provides a unique platform to explore partnerships, transactions, and the latest trends shaping this high-growth segment of the industry,” Mariutti continued. “It’s where the right people come together to move deals forward.”

Ready to take the next step in your investment journey?
Join BLLA and leaders like JLL at the 2025 Boutique Hotel Investment Conference in NYC this June. Learn more and register here.