The increase in sales is due to both an increase in the numberof hotel sale transactions and an increase in the sales price. Thegrowth is due to many factors, including high and increasingoperating returns, more and diversified buyers, an increasedability to obtain financing and a limited amount of newlyconstructed hotels, according to the report. "Many choose to buyand renovate over building because of those high [construction]costs," she says.

There is a greater "transparency" regarding hotels' operatingresults, which allows investors, who may not have a lot ofexperience with buying and managing hotels, to enter the market,according to the report. "Hotels are seen as becoming more of amainstream asset class," Paider says. More hotels are also enteringthe marketplace as some of the publicly held companies involved inhotel real estate are selling the hotel buildings but continuing tooperate the hotel. "They are moving to an owner-operatorstructure," she says.

A recent trend is groups of buyers pooling their resources tobuy large hotel portfolios, which is something Paider seescontinuing. Hotel portfolio sales reached $19 billion last year,which was nearly double the 2005 amount. "The trends that willdrive the next couple of years are flipping, with those shorterhold periods, and mega deals," she says. "Private equity playerspool their capital to enable them to compete for these bigger dealswithout the competition."