Amid surging demand for hotels through the summer travel season, executives at the largest U.S.-based hotel ownership companies have been watchful for opportunities to buy and grow their portfolios.

Reporting second quarter earnings, leaders from hotel real estate investment trusts discussed the transaction environment and their part to play in the market.

Read comments from several companies below.

“We're very open to acquiring in 35 different markets that we've spent a lot of time researching and building our database for, which is about 15 to 20 more than where we've invested historically and then on top of that, drive-to resort properties, which can be anywhere in the 48 states. As it relates to urban markets, our investments are going to be driven by availability and what we find attractive.

“And hopefully, our focus will continue to be assets where we can add value through redevelopment, repositioning, operator changes and applying our best practices and operating expertise; and not pay for those opportunities, which is really key. As it relates to New York, specifically, while it's not redline, I think it's going to be a tough place for us to buy.

“We think the recovery to any meaningful cash flow is going to take quite a while. The market is going to struggle and [it will] be a slower recovery, given its heavy dependence on international inbound travel, for which we've not yet even opened our borders yet. So that's a toughie for us. It may be more attractive for a private investor who doesn't care about cash flow for the next few years and where you're basically buying on a price-per-pound basis.

“Given the high risk we attribute to the market, and between ... the rate issues, the challenges with the union and work rules in the market and real estate taxes, it's going to be hard for us to find the right deal at the right price with the right opportunity."

“To further improve liquidity, last week we initiated the sales process with respect to approximately 59 Sonesta-branded hotels, which we expect to sell and convert. …

“The plan is to sell them encumbered by brand but not encumbered by the Sonesta management agreement. So investors who might buy that portfolio, or groups of hotels within the portfolio encumbered by brands, could manage themselves or engage third-party managers.

“We're expecting that these are probably going to be sold in small portfolios, maybe between five and 10 hotels in different regions of the country. But we expect that we also will get some portfolio bids. We're going to evaluate, whether the bids come in encumbered or unencumbered ... and do what we think is in the long-term best interests of SVC.”

"The overall environment remains incredibly competitive for hotels. The stuff that's been broadly auctioned, I can tell you we haven't come close to winning because ... I think people are stretching on some of these deals where there's a lot of competition. Again, 15, 20 offers. It's a competitive environment. A lot of people want to own hotels — private equity, family office, international buyers. We have seen in the last 60 days an uptick of properties coming to market. ... There's more certainty as the mask mandates went away in June and fundamentals got better.

"The buyers said 'now feels like a better time to be a seller.' The environment just feels better from that side. And I think some of these trades and some of the assets have brought more buyers out of the woodwork. All that's kind of in play right now. ...

"There just aren't any [larger full-service hotels] for sale. Recently, we were just looking at what's in the market. I can't think of one big box that any broker has listed at the moment. The general attitude, if you own big boxes, is that it's not the right time to market. Group will come back. I think people are pretty optimistic on the group front. But it doesn't feel like it's the time to market that asset. With no trades in the market, it's hard to hard to give you a perspective on exactly where value is on the big boxes. I suspect that, this time next year, we'll see group recover, maybe a little bit better than people expected, and that will bring buyers and sellers together next year on those kind of assets."

"Given the strong appetite for institutional quality assets in major markets by private equity, we took advantage of market conditions and are on track to exceed our stated goal of $300 million to $400 million worth of asset sales this year with our recently completed and pending transactions.

"We remained disciplined throughout the pandemic as the bid-ask spread narrowed significantly following the widespread distribution of the vaccine, further supported by our most recent completed and pending San Francisco hotel sales, which went under contract at less than a 2% to 3% discount to pre-COVID levels. Despite increased price transparency in the private markets, the valuation gap between public and private pricing remains at among the widest gaps in recent memory. Similar to previous cycles, however, we expect the valuation gap to narrow as the lodging recovery continues to take shape and the pace of private market transactions accelerate over the coming months. With respect to additional asset sales over the balance of the year, while we do not have anything to report at this time, we are always seeking to maximize shareholder value, and we'll entertain attractive offers as they arise."

"One of the big stories of the pandemic that has played out is that there hasn't been as much distress out there as everyone thought there was going to be. There were a lot of funds raised to go buy distressed hospitality assets, and there just hasn't been that much trading in the distress market. ...

"Resorts and big-box hotels have a lower supply growth [compared to] any asset class in hospitality, so we'll continue to look at those fields as well. I haven't seen it yet, but I expect that we may be seeing assets come to market in some of the urban markets as things continue to open up. And when we get back to a sense of more visibility with respect to underwriting, I think you'll see some of those assets trade and by no means are we writing off the major urban markets. Generally we don't have a red line through any market today."

“As we explore potential opportunities, we leverage our long-standing industry relationships, in addition to evaluating brokered opportunities, in pursuit of accretive transactions that we believe will maximize long-term value for our shareholders and further grow and enhance our existing portfolio. The core elements of our portfolio strategy remain largely unchanged and have been further validated by our recent experience. As we pursue acquisition opportunities, we will continue to look for rooms-focused assets in the Marriott, Hilton and Hyatt brand families that further diversify our portfolio across markets, location types and demand generators.”

On value of a single-asset versus a portfolio transaction: “A lot of that depends on the market. We had, preceding the pandemic, seen more individual asset trades than we had portfolio trades. But in prior periods, they're looking back a decade or so, portfolios had tended to trade at premium pricing. I think there's increasingly a pool of buyers who are interested in amassing scale in select-service assets, which has created an environment which we anticipate will persist where portfolios trade on par or at premiums to individual asset sales.

"That would be consistent with what we've seen in the past. And while our portfolio sale was early and the buyer for the pool was a group that had historically done more individual asset transactions, there are an increasing number of private equity groups and other investors who are interested in larger portfolios and financing is available for those at this point in time."

"The pipeline today is more active than it's been in any time since the pandemic began and certainly more active than it was 30 days ago, 60 days, 90 days ago. The quality of assets that are on the market today are higher than what we've seen in any time before. I do think pricing has moved upward. I don't think there's any question that fundamentals have improved and rates continue to stay low. The financing markets have become more constructive. You've seen the asset prices continue to improve. I do think we'll find some unique opportunities. [Our $33 million acquisition of Residence Inn Steamboat Springs in Colorado] is a really good example of an asset that is kind of right down the middle of the fairway from a demand perspective and a lack in new supply perspective, because we are able to transact on that. It's a very, very compelling valuation and then we can underwrite a compelling stabilized yield on that type of asset. And I think there'll be more out there.

"We're fortunate that we've got $150 million of capacity under our existing facility. We've got a partner who is eager to grow it, and our hope is that we'll be able to find opportunities. We'll always be disciplined around how we allocate that capital. It will continue to be a returns-driven approach for us. But given the magnitude of assets on the market, we're hopeful to be able to find some opportunities here. ...

"I don't know that we've seen a huge delineation between pricing — between single assets and portfolios. I would say it's more market-driven and kind of demand-driven. You're still seeing probably steeper type of discount to pre-COVID pricing in core [central business district] urban markets than you are in drive-to, leisure-oriented markets."

"Over time there should be more properties coming to market and more opportunities than what we necessarily see today. We're seeing the early stages of that with some more properties being out to market. Part of it is people still need to really understand where the long-term trajectory is going with some assets, and we talked about it a little bit as far as having a little clearer direction on where things are going to go.

"Certainly a number of lenders have been willing to be very accommodating in the short term; that may change over time as well. We're still in the early stages of that. You've seen some transactions happening that clearly haven't been distressed type of transactions. You just haven't seen that much of that, but I think we're still really early on in this part of the cycle. From our perspective, it certainly makes sense to be patient and wait for as better opportunities materialize. ...

"It's hard to say whether you're going to see the large number of distressed situations. I do think you're going to see more products hitting the market, which will presumably create some more opportunity because, currently, you're in a situation with a good amount of capital chasing a relatively small number of interesting deals where the pricing ends up being pretty aggressive. ... We're currently underwriting transactions, too, and analyzing a lot more than we did three or six months ago. But we're willing to be patient and willing to wait for those deals that are absolutely on strategy for us and that can meet our return requirements."