Execs describe how disruptions hit hotels unevenly throughout 2025
MIAMI – With a hospitality brand defined as ‘barefoot luxury’ by Co-founder and CEO Lucia Penrod, Nikki Beach Hospitality Group continues to gain traction globally with an established presence in some 10 countries and new concepts on the drawing board.
Established in 1998 by Penrod and her late husband Jack as a tribute to his daughter Nicole, who tragically passed away at 18, the Nikki Beach brand got its start in Miami with a beachside café. The Miami-based, family-owned company has now grown into a multi-faceted entity which includes several subsidiaries including a Beach Club Division; a Hotels & Resorts Division; a Lifestyle Division; a Special Events Division; and Nikki Cares, a non-profit charity division.
In addition, Penrod—who took over the reins of the company in 2018—told Hotel Investment Today that the company is planning to launch a new boutique hotel brand that will “really stamp our DNA in the hotel industry.”
Eschewing the franchise model for hotels, all of the resorts operate under management agreements. Nikki Beach owns its standalone beach clubs in Saint-Tropez and Saint Barth, along with Lucia Cannes by Nikki Beach.
Penrod elaborated on how they go about choosing partners and investors.
“What we look for is a partner that has the same vision for serving in the hospitality industry,” she said. “We look for partners that understand who we are. We have to connect honestly. We are very friendly to the partners, we are very transparent when we sit down and discuss how we’re going to do things.”
The company has a host of global properties in development, including in Antigua, which Penrod called “one of the most exciting projects we have right now.” Other global properties in the pipeline include Oman, Ras Al Khaimah and Baku, the latter of which will add a resort and residences to an already open Beach Club.
Penrod also noted the company is hoping to announce a project in northern Africa this year as well. Within the U.S., she asserted the company has been focused on expansion in south Florida, which has the “that vibe of celebrating life.”
Decidedly positive
Originally from Nicaragua, Penrod arrived in Miami in 1979 and spent five years serving the Diplomatic Corps, representing the interests of South Korea and Venezuela. In 1984, she joined Jack Penrod’s organization to oversee the Jockey Club of Miami. A year later, she assumed the role of project manager for Penrod’s Beach Club, which would become the first Café Nikki.
Penrod—who pointed out she “loves talking about her brand”—described her experience as a female CEO as decidedly positive.
“I have never experienced anything that I haven’t felt comfortable with as a female CEO, even though the conversation has always been ‘you’re a woman and this is a man’s world,’” she noted.
As an example, Penrod talked about visiting Oman—where the company is gearing up for the soft opening of Nikki Beach Resort & Spa Muscat later this year—to discuss the possibility of expansion. Unsure what kind of response to expect from local businessmen, Penrod was pleasantly surprised.
“My brand is so optimistic and so full of life. So, I think that’s what I received and that’s why I felt so welcome. I never felt any obstacles, any rejection or any challenges because if you want to do business with me you know I’m a female. As a female, I’m having fun in this field, I don’t feel any challenges,” she emphasized.
The feminine touch
Penrod did acknowledge female executives are a key demographic for the company’s hotel brand and will very much be a focal point of the new boutique concept being developed.
“The hotels have always been dedicated to everybody, but we make sure that we keep that feminine touch in everything we do,” she continued. “I believe that is one of the most exciting things we’re bringing into the hotel industry because while many hotels are beautiful they’re mostly designed for men by men. You have all these beautiful hotels, they are gorgeous, but all those [female] details are missing.”
The Nikki Beach hotels feature signature white decor, exclusive beach clubs with DJs, curated entertainment and high-end amenities like Nikki Spa, Tone Gym and upscale dining options. The company’s current Nikki Beach Resort & Spa portfolio includes Dubai in UAE; Koh Samui in Thailand; Santorini and Porto Heli, both in Greece.
Penrod noted that the company opted to branch off into hotels after associating with properties and their respective F&B operations as part of its Nikki Beach Club. She described 2025 as an “incredible year” throughout the company’s hotel portfolio noting that F&B represents roughly 50% of gross operating revenue for the company’s hotels.
“We quickly found out that our food and beverage is so strong that it became an added asset for the hotels,” Penrod said. “When we saw how the hotels [we worked with] were all of a sudden becoming busier and more successful, then we said ‘maybe it’s time that we start doing our own.’ That’s how we moved from the beach clubs and food and beverage to the hotels because we knew that we built something very, very strong, and it’s our food and beverage component.”
In terms of what’s ahead for Nikki Beach, Penrod flatly states “we’re not even halfway there.” Describing herself as “very hands on,” she indicated there’s still lots of runway for her as CEO.
“I’m still having fun,” she said. “The reward that you get from adding simple things to your business that make people fall in love with you is a feeling that is very hard to replace. On top of that it comes with a very good financial reward, but what comes first is serving my customers either in the food the beverage outlets or the hotels and restaurants. It’s very rewarding.”
In its 2026 Canadian Hotel Investment Report, Colliers said that while geopolitical uncertainty persists globally, Canada remains an attractive destination for foreign capital, and hotels continue to demonstrate their ability to outperform through revenue flexibility, inflation-hedging characteristics, and diversified demand drivers.
Liquidity across hotel equity markets remains ample entering 2026, according to Colliers, though capital is increasingly patient and selective. It said investors are prioritizing assets with clear operating upside, durable cash flow, and realistic paths to value creation. Bid ask spreads are narrowing, but disciplined pricing remains a hallmark of the current cycle.
With limited new supply in many Canadian markets, investor focus continues to skew toward well-located, high-quality assets, particularly those benefiting from brand affiliation, recent capital investment, or repositioning opportunities. Secondary and tertiary markets with proven demand drivers are gaining further traction as core markets remain tightly held.
As cap rate compression moderates, Colliers said asset-level operating fundamentals are once again front and center. Revenue growth—particularly through rate optimization—alongside cost containment and margin management will be key differentiators in asset performance. Investors are underwriting operational efficiencies as much as location.
Liquidity continues to improve, with increased competition among lenders and greater creativity in deal structures, according to the report. While leverage remains prudent, flexible financing— including structured debt and seller financing—will play a growing role in facilitating transactions, particularly for repositioning and portfolio strategies.
Interprovincial capital is expected to remain active, with Alberta, Atlantic Canada, and select resort markets attracting incremental attention due to favorable entry points, diversified economic drivers, and strong leisure and transient demand. Major urban centers remain highly sought after, though opportunities are often limited by tightly held ownership.
Domestic capital continues to anchor Canadian hotel investment activity, driving the large majority of transaction volume. Global capital remains highly selective, engaging primarily in large-scale portfolios, marquee single-asset transactions, or situations with strategic or platform-building rationale. While favorable currency dynamics and Canada’s relative stability remain supportive, international participation is targeted rather than widespread, Colliers stated.
Colliers said the next phase of the cycle will reward expertise, scale, and strategy. While historically considered high-risk given the operating nature of the business, the lodging sector is now increasingly being viewed as part of alternative real estate investments capable of generating durable, long-term returns.
2025 takeaways
National hotel investment activity built further momentum in 2025, extending a multi-year growth trend with transaction volume exceeding $2.3 billion.
- Substantial transactions in Canada’s major markets (+1 million population) were a primary driver of overall activity, increasing 37% year-over-year to $1.4 billion (62% of dollar volume) and lifting price per room metrics to historic highs.
- Strong operating cash flows and favorable sell-side conditions enticed owners to selectively bring assets to market, while portfolio offerings remained limited (6% of volume).
- Nearly 80% of the year’s 132 deals took place in secondary, tertiary, and resort-oriented markets, reflecting investor confidence beyond gateway cities as capital increasingly traversed provincial boundaries in pursuit of yield and relative value.
- Concentrated trading in city centers drove full-service transaction volume above $1.4 billion, the highest level in nearly a decade, alongside record price-per-key metrics.
- Investment activity across other service segments was more balanced, with focused-service pricing averaging above $200,000 per key (up 4% year-over-year), and limited-service assets recording a notable 17% increase to $116,000 per key.
- Quebec transaction volume rose 29% year-over-year, driven by multiple sales in Montreal’s downtown and airport submarkets. Ontario registered its highest average price per key on record, driven by elevated trading in Toronto and Ottawa. Notably, provincial volume surpassed $1 billion without any major portfolio transactions.
- Alberta and British Columbia remain highly competitive when assets come to market, though Western Canada transaction volume declined 7% year-over-year as slower activity in Alberta was partially offset by an increase in British Columbia.
- Atlantic Canada investment volume increased nearly 30% year-over-year, led largely by Ontario-based buyers across both portfolio and single-asset sales.
While several institutional-grade assets came to market, acquisition activity was dominated by private capital sources with limited participation from traditional institutional capital.
- Hotel investment companies (HIC) remain the most active buyers, driven by continued portfolio expansion among Canada’s largest owners and smaller ownership groups scaling into the HIC category.
- Real estate company capital primarily targeted major metro markets, positioning hotels as a diversification strategy within broader real estate portfolios.
- Select trophy assets attracted foreign interest; however, transactions ultimately closed with Canadian buyers, reflecting the strength of the domestic market and foreign capital’s historic preference for large portfolio acquisitions.
- Increased participation from a broad variety of institutions including Schedule I banks, cooperatives, and credit unions has resulted in increased liquidity to the lodging sector.
Cap rates
Lodging investors continue to benchmark value using a combination of going-in and stabilized yields, gross room revenue multipliers, and price-per-key metrics, calibrated to asset location and business composition between rooms and other departments.
Hotels continue to offer an attractive yield premium relative to other real estate asset classes, with competition for high-quality assets maintaining pressure on cap rate expectations.
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