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- You Ask, We Answer: What’s the Current Situation in the UK Hotel Investment Market?
You Ask, We Answer: What’s the Current Situation in the UK Hotel Investment Market?17 07 2018
Whether you’re investing into a new section of the property market to diversify your portfolio, or you’re a seasoned investor expanding your hotel investments, it’s always important to have up-to-the-minute insights into how the market is performing.
And it’s looking very positive for the UK hotel investment market. Savills reports transaction volumes reached £5.4 billion in 2017, up 32% up on 2016 levels. This investor appetite is likely to remain robust throughout 2018 with overseas and institutional buyer activity expected to continue.
According to PWC, London enjoyed occupancy growth up to March 2018 of 2.6% and ADR gains of 6.3% driving RevPAR growth of 9%, compared to the same period last year. Tourism numbers are also healthy. We have seen many visitors from North America, most likely thanks to a boost from the weak pound.
The Pace of Growth
It remains to be seen whether this pace of growth will remain strong throughout the rest of the year. But the UK hotel investment market has now seen a new turn. This comes in the form of fresh interest in generating revenues from under-utilised space. Along these lines, these industry continues to innovate, and we can expect to see the emergence of new hospitality concepts such as The Student Hotel.
This Dutch-based company offers a hybrid of hotel, hostel and student accommodation. This is a model that we can reasonably expect to be rolled out in the UK in the not-too-distant future. The flexible structure is likely to translate into maximised revenues unaffected by seasons or a restrictive demographic. And it may just create a whole new direction for UK hotel market investment.