There’s a continuing discount afoot in the hospitality industry, and investors are taking notice. Public hotel REITs have been trading at some of the steepest discounts to net asset value (NAV) in the real estate sector in recent months, with shares sitting roughly 33.5 percent below NAV, according to S&P Global Market Intelligence.
The gap that started to emerge in 2022 has gotten wider and wider, raising new questions about whether public markets are undervaluing the real estate these companies own. For REIT executives and shareholders, this gap reflects a frustrating disconnect between stock prices and the value of the hotels in their portfolios. For others, it may signal opportunity.
“Take-private interest has re-emerged noticeably over the last several quarters,” says Suraj Bhakta, CEO of NewGen Advisory and chief legal counsel of NewGen Worldwide. “When public REITs trade below the intrinsic value of their real estate, it creates an opening to acquire institutional-quality assets at a discount.”
Take-private talk turns into action
Some investors are taking that opening.
Ashford Hospitality Trust, for example, recently announced it had formed a special committee to review strategic alternatives, including a potential transaction involving the company. While the review does not guarantee a sale, it illustrates the pressure facing public hotel platforms trading well below the value of their underlying assets. It also highlights the tension many REIT leaders are facing.
“We remain frustrated by the discrepancy between the value of our underlying portfolio and the market value of our common stock, and the Board has tasked the Special Committee with proactively exploring alternatives to bridge that gap," says Stephen Zsigray, president and CEO of Ashford.
This disconnect between stock prices and real estate values is pushing investors and boards to consider whether some hotel platforms may be better positioned outside the public markets. That idea has already played out once. In 2023, KSL Capital Partners agreed to acquire Hersha Hospitality Trust in a roughly $1.4 billion deal, taking the lodging REIT private and proving how quickly valuation gaps can translate into transactions.
Braemar Hotels & Resorts is trying to forge a similar path. After months of shareholder activism, the luxury hotel REIT formed a special committee last August to explore strategic alternatives and ultimately launched a sale process, putting a spotlight on the valuation gap facing publicly traded hotel owners. As of early 2026 the company is still evaluating potential transactions, with its board even withholding a 2026 common dividend policy while the review continues.
When taken together, a pattern emerges from this recent activity. If a gap between public equity pricing and private-market asset values remains for long enough, investors inevitably begin to wonder whether those assets belong in the public markets at all.
Positioned to act
Public market investors and private buyers are still underwriting hotel real estate very differently, and that dynamic is shaping who is most likely to pursue take-private opportunities.
“The disconnect is tangible and meaningful,” Bhakta says. “For private investors, that gap is the opportunity.”
Bhakta says several types of investors are particularly well positioned to capitalize. Family offices have emerged as some of the most active participants, drawn to hospitality real estate as a hard-asset inflation hedge, especially in high-barrier urban and resort markets. Sovereign capital is also relevant for similar reasons. The common thread between these investors is that they tend to evaluate hotels very differently than the public markets do.
“These investors are not pricing hotels on quarterly earnings volatility, they are underwriting normalized cash flow, brand strength and real estate fundamentals over 10- to 20-year horizons,” Bhakta explains. “For them, acquiring institutional-quality hotel platforms at a public-to-private discount is a strategic allocation, not a tactical trade.”
Bhakta believes those most likely to pounce often share several characteristics, including concentrated, high-quality portfolios; strong brand affiliations; manageable leverage; a clear public trading discount to estimated NAV; and identifiable operational upside.
Beyond that, the broader conditions need to align. These include public REIT share prices trading at discounts to NAV, private capital with conviction around long-term cash flow durability and debt markets that are stabilizing or improving.
“When all three are present simultaneously – as we are beginning to see now – the conditions for take-private activity become compelling,” he adds.
Still, compelling does not equal a done deal. Today's cost of capital demands disciplined underwriting if these take-privates are to be successful.
“This is not the 2012 to 2016 opportunistic cycle,” Bhakta adds. “It is more selective and surgical.”
That said, debt markets are showing signs of stabilization, which he notes is one of the key conditions enabling renewed take-private discussions. If those discussions continue to lead to action, Bhakta believes this would send a powerful signal about investor sentiment toward the sector.
“Take-private activity at the platform level reflects conviction that asset-level valuations exceed public equity pricing, that hotel cash flows are stabilizing or improving and that long-term RevPAR growth remains intact,” he says. “When sophisticated capital is willing to acquire entire REIT platforms, it is less about financial engineering and more about confidence in underlying real estate fundamentals.”