The UK regional hotel investment markets have reported positive performance during the third quarter of 2013, a new report from Hotstats and Savills has revealed.
According to the research, when looking at year to date figures (September 2013), occupancy was up 1.9 percentage points alongside average rates, in addition to revenue per available (RevPAR) seeing a 1.9 per cent and 4.6 per cent increase year-on-year.
Furthermore, the study revealed that gross operating profit per available room (GOPPAR) was up 4.5 per cent year-on-year, thanks to improvements in room rates and occupancy, as well as a stabilisation of cost growth. In fact, August saw one of the highest annual jumps in GOPPAR, rising 11.1 per cent.
These are just some of the reasons that suggest investor confidence is on the rise in the UK’s regions, with the highest levels of hotel transactions seen outside London since 2007 and sales totalling £1.7 billion.
As observed by Savills, high net-worth individuals and smaller private groups have been acquiring more property in the regions – as have foreign investors.
While the improving performance was seen across most of the country, Bristol was especially positive according to the Hotstats data, with strong growth across all headline indicators and GOPPAR up 10.4 per cent as of October – in comparison to figures recorded up to the same month in 2012.
It was also revealed that regional hotel transactions as a share of total UK volumes accounted for 43 per cent of activity. Although this is still someway off the totals recorded pre-financial downturn, it does represent a renewed interest in this particular market and an increasing investor confidence.
The current news is positive, but the outlook for the 2014 is also bright for investors and the regional hotel sector.
Savills has revealed some operators have reported that bookings for next summer are already up on those recorded in 2013.