UK hotel investment market still going strong

UK hotel investment market still going strong

New research by global real estate services provider Savills show that the first half of 2018 has been a very strong period for the UK hotel investment market. Despite the noise surrounding Brexit, UK hotel investment appears to be surviving the slings and arrows of the negotiations and coming out on top.

The figures reveal that approximately £3.2 billion was invested in UK hotels during the first six months of the year. This represents a 28% increase than in the same period in 2017.

A notable trend is that the UK hotel market continues to attract significant interest from overseas investors with international purchases accounting for around half of the abovementioned transactions (£1.6 billion).

The north of England fared particularly well on the investment stakes with £480 million worth of deals being transacted in the region so far this year. Savills expect this figure to grow to £5.4 billion by the end of the year.

Commenting on the research, 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.”

So why is hotel investment doing so well?

The simple fact is that the UK pound has declined in value since the EU referendum and this has attracted more tourists from Europe, US and China keen to get more for their money. In 2017, around 40 million visitors to the UK spent over £25 billion – a 6.2% increase on 2016 according to figures from Visit Britain.

The weakness of the pound has also prompted more UK citizens to holiday at home.

This has provided a huge boost to the hotel market in the UK, making it a very strong proposition for investors.