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Hotel market

UK hotel investment market stays strong in 2018

Author: Staff





New questions are being asked every day about how Britain’s forthcoming withdrawal from the European Union could affect various industries and areas of business, but one segment of the UK economy that doesn’t appear to be feeling the effects of Brexit is hotel investment.

Recent research has highlighted significant growth in this space in 2018, with one firm saying the hotel market is “one of the few sectors to fully benefit from the response to the EU referendum”.

A strong first half

The first six months of 2018 was a particularly strong period for the UK hotel investment market, according to Savills.

Research by the real estate services provider showed that £3.2 billion was invested in UK hotels during the first half of the year, 28 per cent more than in the same period of 2017.

One of the key trends showed that the UK hotel investment market continues to appeal to international buyers, with foreign purchases accounting for half (£1.6 billion) of total transactions. Israeli and Canadian investors made up 24 per cent and 14 per cent of the overall total, respectively.

The north of England demonstrated its ongoing strength in this sector, with £480 million worth of deals being done in the region during the first half of 2018.

Martin Rogers, head of UK hotel transactions at Savills, said: “The UK hotel market remains attractive to both domestic and overseas investors, providing something for everyone due to the range on offer.”

The firm expects the hotel market to stay active for the rest of 2018 and attract total investment of approximately £5.4 billion before the year is out.

Benefiting from Brexit?

In its own review of the UK hotel investment market in the first half of 2018, specialist business property adviser Christie & Co said it was a “stellar period”, partly thanks to the repercussions of the Brexit vote.

The British pound has experienced a decline in value since the EU referendum, triggering an increase in leisure travel to the UK from Europe, the US and China.

Nearly 40 million visitors to the UK spent more than £25 billion in 2017, marking a 6.2 per cent increase on the previous year, according to VisitBritain figures. This has provided a valuable boost in demand for hotel rooms.

Furthermore, the weak pound has also encouraged more British citizens to take holidays at home, further driving occupancy levels and room revenue for hotels.

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