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Hotel market

Rise in regional hotel investment seen across the UK

Author: Staff





A growing number of corporate and leisure guests are being attracted to the UK’s regional cities, which in turn could lead to a considerable upshift in investor activities across the country. This is the conclusion of new research published by PricewaterhouseCoopers (PwC), which predicts 2017 could be a bumper year for investment in the nation’s regional hotels sector.

New figures published as part of PwC’s latest Hotels Forecast have shown occupancy rates in regional cities across the UK have grown by 0.5 percentage points to 77 per cent in 2017 – marking a record high for the industry.

At the same time, revenue per available room (RevPar) is expected to rise by 2.3 per cent to £54 by the end of this year. Again, this marks a major uplift for regional markets in general, and a figure that is 20 per cent higher than those previously recorded.

It all points to now being a particularly attractive time for new investors to the market, with major cities including Manchester, Liverpool, Birmingham, Leeds and Newcastle all expected to witnessing ongoing strong demand for occupancy among visitors.

A major driver of this upward trend in occupancy rates and RevPar has been the UK’s ongoing attractiveness to visitors from overseas. Indeed, with the pound continuing to face strong headwinds in international forex markets, travellers from abroad are able to secure more affordable deals to visit many of the UK’s most popular cities and attractions.

This latest data builds on the results of a report released by JLL last year, which highlighted a surge in investor behaviour for UK regional hotels following the country’s decision to leave the European Union.

Director in JLL’s hotels & hospitality group Kerr Young stated at the time: “London has long been a focus for hotel investment, but now regional markets are witnessing the benefit from overseas investors following the weakening of the pound.

“Despite initial uncertainty in the immediate aftermath of the EU referendum, there is a positive story around the UK in terms of macro-economic stability and transparent transactional environment.”

The success of regional markets during recent months is therefore clear for all to see, with this opinion shared by PwC’s senior economic adviser Dr Andrew Sentance – author of the 2017 Hotels Forecast. In it, he stated his belief that “hospitality and tourism is a key sector for growth, employment and overseas earnings in the UK”. As a result, the future appears bright for investors in the sector during the months and years ahead.

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