Hotel investors seeking “hidden gem” opportunities should stick to coastal markets, according to a new report by Jones Lang LaSalle Hotels. The Chicago-based hotel investment brokerage considers these markets, which include Charleston, S.C. and Calgary, Canada, to be lesser-known areas that offer strong hotel investment opportunities.

“There is no specific blend of elements that each market shares, as future growth is projected from a multitude of dynamic components,” says Kristina Paider, senior vice president of marketing and research for Jones Lang LaSalle Hotels. “Each market exhibits specific characteristics and developments which draw on the future trends of the lodging industry, propelling them from the sidelines onto the mainstream playing field. These less obvious markets offer the potential for lucrative returns.”

The top ten cities in alphabetical order are:

*Calgary, Canada *Charleston, S.C. *Jacksonville, Fla. *Kauai, HI *Mammoth Mountain, Calif. *Monterrey, Mexico *Portland, Ore. *Sacramento, Calif. *Savannah, Ga. *Scottsdale, Ariz.

“Markets such as New York, San Francisco, Chicago, Washington, DC, and Los Angeles represent the ‘usual suspects’ for lodging investment, as they encompass the infrastructure, product and strong demand generators necessary to attract hotel investors and their capital,” says Arthur Adler, managing director and CEO-Americas for Jones Lang LaSalle Hotels in New York.

“However, cap rates and longer-term yields have been driven down in these markets due to strong market fundamentals, significant investor interest and a general lack of product. The hidden gem markets offer investors the opportunity to earn a favorable risk adjusted return, potentially with less competition for assets,” adds Adler.