Hospitality Funding: How Hotel and Restaurant Groups Raise Capital

Hospitality funding sits between real estate and operating businesses. A hotel is a building and a business at the same time. A restaurant group is mostly a business, but its leases, build-outs and locations look a lot like property. That’s why the investors, the paperwork and the pitch are different from a tech raise. If this is your first project, see funding a first development project.

Hospitality is one of the industries we work in at Investor Links. Here’s what the market looks like this year and how hotel and restaurant groups actually raise money.

What does hospitality funding look like in 2026?

For hotels, deal activity is up from last year. LW Hospitality Advisors’ midyear 2026 U.S. hotel sales survey counted 107 single-asset hotel sales over $10 million in Q2, totaling about $3.8 billion, with an average deal size of roughly $35.3 million. Comparing the first half of 2026 with the first half of 2025, the number of sales rose 26% and total dollar volume rose 38%.

The same survey says debt and equity capital are still flowing into hotels, with investors “disciplined, selective, and investment basis focused.” It also describes a lopsided recovery that favors luxury and value hotels over the middle of the market, and says margin, not revenue, is where operators are fighting hardest.

Globally, JLL’s 2026 Global Hotel Investment Outlook reported that direct hotel investment in 2025 was up 22% from the 2023 low, with the Americas up 27%. JLL also notes that most major US cities have hotel construction pipelines below 2% of existing supply, which supports the value of hotels already built.

For restaurants, we didn’t find a reliable public source for restaurant group funding totals or deal counts, so we’re not quoting any.

Who funds hotels?

Private buyers and investors. In US commercial real estate as a whole, private investors are the largest buyer group. CBRE’s Q2 2026 capital markets report put them at $70.9 billion of year-to-date volume, ahead of institutional investors at $22.4 billion. Cross-border investment rose 35% in the first half to $14.4 billion, led by the retail, hotel and office sectors.

Private equity and real estate funds. JLL says private equity firms with undeployed capital are targeting value-add opportunities, portfolios and quality hotels priced below replacement cost.

Family offices. Many own real estate, but they’re selective. In J.P. Morgan’s 2026 Global Family Office Report, real estate averaged 7.4% of portfolios across 333 offices, and 40% had no real estate exposure. The ones worth approaching have owned hotels or similar property before.

Lenders. Banks, debt funds and, for smaller hotels, SBA-backed loans cover part of the cost. Equity fills the rest.

How do you raise capital for a hotel?

Start with the numbers an investor will check first: what you’re paying or what it costs to build, the brand or flag, the management company, the market’s demand drivers and your downside case. Then build a list of investors who have done hotel deals of a similar size and type, in or near your market.

A few practical points from our work:

• Lead with the basis. Investors are “investment basis focused,” as the LWHA survey puts it. Show your cost per key and how it compares with recent sales nearby.
• Name the operator. Who runs the hotel matters as much as the building. If you’re not the operator, say who is and what else they run.
• Show the downside. Slower ramp-up, lower rates, higher labor costs. Investors trust a plan that shows the bad case.
• Be clear on structure. Is the investor buying into one hotel or a fund? Deal by deal is easier to explain to a first-time partner.

How do restaurant groups raise money?

Hospitality groups usually fund the buildout of a new restaurant concept from three sources. An SBA 7(a) loan through a participating lender can cover equipment, furniture and fixtures, working capital and real estate, up to $5 million. Private investors, often local business owners and high-net-worth individuals who know the brand, put in equity. Once several locations work, private equity firms, food and beverage companies or franchise partners can fund the next ones. Investors back a new concept on unit economics: what one location costs to open, how long it takes to pay back, and why it will work like the last.

Restaurant groups usually mix three sources.

SBA-backed loans. The SBA’s 7(a) loan program goes up to $5 million and can be used for real estate, working capital, equipment, furniture and fixtures, and changes of ownership. You apply through a participating lender, not the SBA itself.

Private investors. Friends and family, local business owners, high-net-worth individuals and sometimes family offices. They often know the brand as customers first. For a growing group, the pitch is about unit economics: what one location costs to open, how long it takes to pay back, and why the next location will work like the last.

Strategic and growth partners. These include private equity firms that back restaurant brands, food and beverage companies, and franchise partners. They usually come in once you have several locations that work and a model you can repeat.

We’re not quoting failure rates, typical check sizes or franchise funding figures, because we didn’t find sources we could check.

What do hospitality investors check first?

Whether it’s a hotel or a restaurant group, these questions come up early:

• What’s the track record of the team and the operator?
• What’s the basis, and how does it compare with the market?
• How do the numbers hold up if revenue comes in lower or costs run higher?
• How much of your own money is in the deal?
• How and when do investors get their money back?

What rules apply when you raise from investors?

In the US, selling equity to investors is usually a securities offering. Under the SEC’s Rule 506(b), you can’t use general solicitation or advertising. Under Rule 506(c), you can, as long as every buyer is accredited and you take reasonable steps to verify that. Your securities lawyer should choose before outreach starts, because it changes what you’re allowed to send and to whom.

What should you send a hospitality investor first?

A short message, not a full offering memo. Say what the property or group is, where it is, what you’re raising, what you’re putting in and your track record in one line. Name a deal of theirs that’s similar. Ask for a short call or permission to send a one-page summary.

Then follow up. Hospitality investors see a lot of deals, and timing matters as much as the pitch.

How does Investor Links help hotel and restaurant groups?

We find the investors who fit your deal and handle the outreach. We build a checked list of family offices, high-net-worth individuals, real estate investors and others whose ticket size and past deals match your project. We write messages around your property or group and run them on LinkedIn and email through HeyReach and Instantly, handle follow-ups, and book interested investors into calls with you.

Investor Links is not a broker-dealer and doesn’t promise funding. For how we work with property projects, see our page on investor outreach for real estate developers, or book a call to talk about your raise.

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