[BERLIN] Investors are expected to pump more money into buying, converting or building hotels in 2015 than in any year since the start of the global financial crisis, with a focus on budget and 'buzz'.

In a sector enjoying the benefits of economic recovery and growing traveller numbers, yields are attractive compared to alternative real estate like office, industrial or retail. "It's not about people loving hotels, it's about investors searching for a return on their money which they can't get these days on government bonds," said Nick Skea-Strachan of law firm BLP at this month's IHIF hotels conference in Berlin.

But investors say there are signs of overheating in some areas, making it more challenging to hit target returns that are typically around 6.5 to 7.5 per cent.

That is forcing them to seek out niches and jump on new trends like lifestyle hotels, serving a generation of travellers looking for a hip place to hang out, not just somewhere to sleep.

Typically featuring smaller rooms, local-themed design and buzzy lounges, lifestyle covers both luxury and budget classes and includes hotels such as Starwood's W, IHG's Indigo , Citizen M, and Moxy. Hilton, Best Western and Germany's Steigenberger are among those recently announcing new brands in this space.

Examples of the genre include the privately owned 25 Hours Hotel in Berlin, where visitors flock to a 10th floor bar and restaurant that overlook the neighbouring zoo.

Liran Wizman, a developer and owner who is opening two W hotels in Amsterdam this year that will be managed by Starwood, told Reuters he had shifted his focus in the past couple of years from mid-scale hotels to lifestyle, which now makes up half his portfolio.

REUTERS