More than $13 billion in U.S. hotel assets traded hands in the fourth quarter of 2021, completing an impressive recovery from 2020 as investors acquired hotels at near record levels. By comparison, hotel sales totaled just $7.2 billion in the first quarter of 2020, the strongest sales quarter that year.
However, the fourth quarter of 2021 also saw hotel sales decelerate from the $15.7 billion that sold in the second quarter and $14.8 billion in the third quarter. Overall, 1,330 hotel properties traded hands in the U.S. in 2021 at an average sales price of $184,000 per key.
The fourth-quarter sales activity was boosted by major acquisitions involving several high-end properties. In Las Vegas, Blackstone sold The Cosmopolitan Hotel and Casino for an allocated sales price of around $3 billion for the real estate, or just over $1 million per key. Six other hotel properties also traded for more than $1 million per key, topped by the Four Seasons Napa Valley, which achieved a price of over $2 million per key.
All these trades are an indicator of continued interest of buyers in high-end properties, which weathered the pandemic relatively well. Luxury room rates in 2021 surpassed 2019 luxury room rates by more than 10%. The makeup of hotel buyers in the fourth quarter was not that different from prior quarters, with the vast majority being classified as national buyers, followed by local buyers. Fewer than 20 of the buying entities were classified as foreign buyers.
Total hotel sales in 2021 was around $48 billion, which is the second-highest annual sales volume after 2015, when $48.4 billion in hotels traded hands. The heightened deal volume is an indicator of the ongoing operational recovery for hotels, which is evident in the operational data tracked by STR, CoStar's hotel data analytics firm. The sales activity was driven by investors who saw compelling values in an industry that was battered by the global pandemic. Leisure travelers have returned, and corporate demand is expected to return as well in the coming quarters, making the industry an attractive target for further capital allocation.