U.S. hotels posted the lowest sales volume of any commercial property type in the first half of 2008 as global transaction activity for the sector plummeted 68% from year-ago levels, according to researcher Real Capital Analytics. U.S. hotel sales volume dropped to $7.3 billion for the first six months of 2008, down 79% from the first half of 2007.

Among properties that sold, the average price reached a record high of $175,000 per unit. While that may seem to be a sign of continued value appreciation and a boon to sellers, researchers attribute most of the recent price gains to a flight to quality that has driven up demand for high-end full-service properties. “This flight to quality was further evidenced by the fact that more than 60% of the assets that traded in the first quarter were located in primary markets,” researchers wrote in Real Capital’s midyear hotel review, published this month.

Globally, volume for hotel sales totaled $19.8 billion at midyear, down 68% from the year-ago period. Sales dropped off considerably in the second quarter to $7.3 billion from $12.5 billion in the first quarter. The hotel malaise even extended to the Asia Pacific region, which has largely resisted significant sales declines for other commercial property types.

In the U.S., hotel sales fell to the lowest volume of any property type. The next lowest, office, experienced a 68% decline in transaction volume in the first half of 2008 from the same period last year.

Like the office sector, however, this year’s hotel performance is being measured against sales at the height of the real estate cycle. Blackstone sold its Extended Stay portfolio during the second quarter of 2007 for $8 billion, for example, and that single transaction amounted to more than all U.S. sales volume in the first two quarters of this year.

On the bright side, the lack of recent transactions suggests that U.S. hotel owners haven’t reached a point of distress that would compel sales at reduced prices. Owners are not rushing to sell, evidenced by a decline in offerings. Approximately $10.3 billion in hotel properties valued at $2.5 million or more, were put on the selling block in the first half of 2008, down 33% from a year earlier.