A palpable uncertainty grips the global economy. As geopolitical alliances fray and capital allocations shift, the traditional rules of investment seem to be rewriting themselves in real time. For those navigating the multi-trillion-dollar real estate market, conventional wisdom is proving to be an unreliable guide.

However, a closer analysis of global capital flows reveals that many of today's seemingly disparate market movements are not isolated trends, but interconnected symptoms of a single, powerful force: the AI-driven equity boom. This explosion of tech-generated paper wealth is creating a distorted reality, propping up luxury sectors while masking systemic risks. It is simultaneously driving a torrent of capital toward the tangible infrastructure of the future - data centers - and away from traditional "safe havens" like the United States, which are facing a harsh re-evaluation.

At a recent closed-door investor briefing hosted by The Bench and Colliers in London in the lead up to Future Hospitality Summit – FHS World in Dubai, a presentation from Colliers and an expert panel discussion shed light on the critical trends that are defining the future of hospitality investment. Here are four surprising truths revealed during the meeting on how this new economic engine is redrawing the global investment map.

1. The AI boom is secretly fuelling your luxury vacation

The foundational layer of the AI revolution is data centers, and the capital pouring into this physical backbone is staggering. In the first half of 2025 alone, fundraising for data centers accounted for 35% of all real estate fundraising - a figure triple the five-year average. This staggering influx is creating powerful and precarious distortions across the investment landscape.This tech race is the primary force keeping equity markets running at all-time highs, with the "Magnificent Seven" stocks alone accounting for an enormous share of market capitalisation. It is this immense paper wealth, generated by soaring tech valuations, that is directly fuelling record-breaking consumer spending on luxury goods and five-star travel experiences. The connection is not coincidental; it is causal.

"The data centers are just like the root of everything that we're seeing in the market... it has accelerated the concentration of global wealth around the world which in turn has kept lux spending on luxury experiences and goods at continuing to break records..." according to one of the panellists.

This relationship, however, is built on a precarious foundation. The entire structure relies on the continued performance of a handful of tech stocks trading at historically high multiples. As one analyst warns, "if anything shifts in earnings or delay in implementation of AI... it can completely have a systemic risk across the market." This dependency creates a house of cards, where a correction in tech could instantly pull the rug out from under the luxury hospitality sector.”

2. America is no longer the world's "safe haven" for capital

While this firehose of AI-generated wealth is fuelling luxury travel, the underlying capital is simultaneously becoming far more selective about where it finds a long-term home. This has led to a dramatic re-evaluation of the United States' decades-long status as the default "safe haven" for global investors.

The data reveals a stark reversal:

• The United Kingdom has now surpassed the US to become the #1 destination for cross-border capital
• Fundraising for US-focused real estate has been slashed, falling from 50% of the global total in 2024 to just 28% in the first half of 2025
• Europe is the clear beneficiary, with 15 of the top 20 destination markets for cross-border investment now located in the EMEA region

This isn't a subtle preference shift; it’s a reaction to a perceived collapse in the viability of cornerstone American cities. Many major US markets are now considered "illiquid" and have been "basically blacklisted" by international capital. The on-the-ground consequences are stark, leading to fire-sale prices that would have been unimaginable just years ago.

"You can buy a trophy hotel in San Francisco for 75k a key because they're losing $3 million a year."

This exodus represents a fundamental recalculation of risk. Global investors who once saw the US as their primary market are now deploying capital into European markets that are demonstrating greater resilience and more predictable opportunities for growth.

3. Middle Eastern megabucks are hiding in plain sight

At first glance, the data on Middle Eastern investment presents a paradox. Despite the region’s immense sovereign wealth, charts show a "perpetual decline in Middle Eastern investment into direct assets globally." This seems to contradict the reality of powerhouse funds like Saudi Arabia’s Public Investment Fund (PIF) commanding trillions in assets. The reality is not a retreat, but a strategic maturation. The era of "trophy asset hunting" - buying individual landmark buildings - is over. Instead, major sovereign wealth funds have pivoted to a more sophisticated strategy of making large-scale, indirect investments to gain entity-level exposure and system-level influence.

Rather than buying a single hotel, they are investing through massive global funds like Blackstone. Instead of acquiring a retail center, they are taking strategic stakes in core infrastructure hubs. The PIF's recent acquisition of a 15% stake in Heathrow Airport is a prime example. This move is not about owning a piece of an airport; it is a calculated play to gain exposure to the entire "hotel and hospitality market, the tourism market" on a far grander scale. The capital is still flowing, but it’s hiding in plain sight within larger, more strategic financial structures.

4. The post-COVID hospitality boom is facing a reality check

For the last three years, the hospitality sector has enjoyed a golden age. Its income returns, measured by Revenue Per Available Room (RevPAR), have dramatically outperformed other commercial real estate classes like office, industrial, and retail, making hotels the asset of choice for many investors."...for anybody getting into the sector over the last three years they've done pretty well and it warrants why you would have got into it over all of these other sectors..."

However, the latest data signals a crucial turning point. The hotel sector's share of total investment activity is now "starting to flatten off." The explosive, broad-based recovery in international arrivals from key source markets like the Americas and Europe is also leveling out. For investors, this marks the end of the easy gains driven by the post-pandemic rebound.

The focus must now shift to finding new, more targeted avenues for growth. The key challenge lies in capturing specific, high-potential source markets. While arrivals from Western markets have normalised, those from the Asia-Pacific region have "yet to recover to 2019 levels." Future performance will depend not on riding a general wave of recovery, but on strategically attracting the next wave of global travelers.

A New Investment Map

These trends are not isolated; they are the gears of a new global investment machine, one powered by tech wealth, guided by a new calculus of geopolitical risk, and increasingly skeptical of old certainties. The AI wealth effect, America’s shifting role, evolving Middle Eastern strategies, and the normalisation of hospitality all paint a clear picture of a market that is more complex and dynamic than ever before. As these powerful undercurrents reshape the investment landscape, are we simply witnessing a temporary market shift, or a fundamental rewriting of the rules for the decade to come?

These are precisely the conversations that define Future Hospitality Summit (FHS) World, taking place from 27-29 October 2025 at Madinat Jumeirah, Dubai. As the region’s premier hospitality investment platform, FHS brings together the global hospitality investment community to navigate these challenges and opportunities. Over the past year FHS events in Riyadh, Dubai and Cape Town welcomed 3,000 delegates, with 24% being investors, and facilitated an estimated $3 billion in deals. With dedicated platforms like the Branded Residence Forum, FHS is where the industry converges to shape its future.