As expected, hotel transaction volume fell to a historic low during the peak of the Great Recession in late 2009, a drop that began roughly 24 months earlier at the end of 2007. Similar to the rebound in performance, transaction activity among economy hotels recovered rapidly, but soon declined as investors shifted their focus to midscale and upscale hotels, which recovered more slowly from the recession. The dynamic between limited-service and full-service hotels reflected a similar pattern, with limited-service properties experiencing a much faster recovery than their full-service counterparts. When digging deeper into the differences between limited-service and full-service transaction volume, which were nearly equal at the beginning of 2010, we notice a stark difference over the last decade. 

While the transaction volume for full-service hotels was three times higher in Q4 2019 than it was in Q4 2009, transaction volume among limited-service hotels was more than seven times higher over the same period. Some of this difference can be attributed to the number of limited-service hotels in the country far exceeding the number of full-service hotels, but it also represents a shift in investor sentiment that will continue to have an impact on transaction activity in the future. With comparatively few full-service hotels constructed in recent years, many of the existing full-service hotels exceeding 10 or 20 years in age, and the lower margins that are inherent with operating a full-service hotel, the potential upside for a buyer is significantly less than it would be for a well-positioned limited-service asset. The substantial increase in limited-service hotel transaction also follows the trend of what has been built over the last decade, what new brands have been introduced by the major hotel chains, and the types of assets that travelers have been seeking in recent years. Overall, since the Great Recession, transaction volume has followed a generally positive trend but has remained well below the peak, which was realized in 2007.