Trophy hotels, like sports franchises, are more than prestige plays; they are scarce cultural anchors where leadership and placemaking, the process of creating a sense of place and community, drive real returns.

For institutional investors, private equity groups, and real estate platforms, trophy assets, whether a landmark hotel or a historic sports club, are no longer just symbols of status. They have become central holdings in portfolios seeking more substantial returns, with brand, location, and cultural weight playing a direct role in valuations and exit strategies. At first glance, comparing football clubs to five-star hotels may seem like a stretch. But the parallels are striking, and the lessons for investors are clear: in both categories, placemaking, leadership, and brand leverage determine whether an asset performs financially or languishes as an expensive vanity project. Both of these experiential sectors make people happy, smile and positive emotions creating storied memories. This does not occur with office buildings.

Sports franchises illustrate the phenomenon vividly. In recent years, valuations across the major leagues have climbed into the billions, with average team values often growing faster than the broader equity markets. The drivers go well beyond ticket sales or broadcast rights: scarcity, global brand resonance, and the ability to monetise entire ecosystems of sponsorship, media, and real estate have transformed these clubs. They are no longer seen as vanity purchases but as strategic cultural anchors with scalable commercial potential.

Luxury hotels at the very top of the market are following a similar path. Per-key prices exceeding $1 million are being achieved in New York, London, and Paris, with sovereign wealth funds and family offices competing to secure these rare assets. Hotel investment volumes in EMEA have actually strengthened, with 2024 activity at the highest level since 2019 and hotels taking a record share of total property transactions. Gateway cities continue to draw capital because trophy hotels recover quickly after shocks, outperform peers on RevPAR, and preserve value through global recognition and heritage. Like sports franchises, they are scarce, high-profile assets whose appeal extends well beyond immediate cash flow.

Like football clubs, hotels are nothing without people and you need to keep investing in those people to get the results on the pitch.

The common thread is placemaking. Sports teams hold their worth because they serve as cultural touchstones, rooting communities and giving identity to entire cities. Landmark hotels play a similar role, shaping neighbourhoods, drawing international visitors, hosting major events, and sustaining the restaurants, shops, and tourism businesses that grow around them. Like football clubs, hotels are nothing without people and you need to keep investing in those people to get the results on the pitch. Their financial upside comes from this multiplier effect, where prestige enhances pricing power, loyalty, and ancillary revenue streams.

For investors, placemaking is not a by-product; it is a lever. But its potential is only realised if leadership is capable of executing it. A General Manager of a trophy hotel cannot be a conventional operator. The position demands a leader who can act as a faithful steward of the brand, someone able to combine operational rigour with international visibility, honour the property’s heritage while still innovating, and project the hotel’s influence beyond its physical footprint. The turnaround of a landmark hotel or the repositioning of a well-known football club shows how innovative placemaking can raise both profile and performance. Without strong leadership, margins slip, and even a prized asset can lose its edge. With the right people in charge, operations remain steady, guests stay loyal, and long-term value is protected.

The latest demand trends make the case clearly. Visitors from Asia and the Middle East are paying extra for heritage properties and authentic experiences, while the recovery of business and group travel has turned landmark hotels in major cities into prized venues for conferences and events. On the buy-side, longer-horizon investors, sovereign wealth funds and family offices are comfortable absorbing higher operating costs for the scarcity and brand cachet that trophy assets deliver.

The risk lies in overpaying for narrative without underwriting the leadership and operational strategy to back it. With borrowing costs at higher levels, discount rates have increased, and it is harder to make the case for yield compression. Future exit values will hinge on consistent cash flow and resilient margins rather than on brand prestige alone. Investors who view these properties as indulgences risk falling short, while those who integrate leadership and placemaking into their investment strategy stand a far better chance of delivering lasting outperformance.

Trophy hotels, much like storied sports clubs, should be understood as cultural cornerstones rather than decorative holdings. Success comes down to prudent investment, capable leadership, and a vision that looks beyond the next quarter. What really drives performance is not the façade or the brand name alone, but the ability of the leadership team to convert reputation into tangible results. For investors who put leadership at the heart of their strategy, these assets reveal themselves not as luxuries but as engines of both cultural relevance and financial strength.

Editorial by Christina Reti for Green Street News
Published on Green Street News – 1 Oct 2025