The UK named top European target for hotel investment in 2017

Like many sectors in 2016, the UK Hotel sector came up against a number of challenges throughout 2016. The hotel market slowed around the time of the EU referendum vote and the value of transactions fell*, but by and large, the hurdle was overcome in the opening months of 2017.

According to the survey by global property advisor CBRE, respondents said they view the UK as the most attractive market in Europe for hotel investment in 2017. The survey stated that over 87% of respondents are planning to invest the same or more into hotel real estate in this year alone.

Although; hotel investment will be significantly shaped by Brexit, the construction pipeline suggests that a number of investors and operators will tackle the uncertainty by delivering fresh, innovative, trendy hotel concepts into UK markets. The results will be profoundly positive for the guest experience. Fortune will favor the bold.

Growth in the London Hotel Market

Binder Dijker Otte (International network of public accounting) Hotel Britain 2017 report has revealed that London hotels have demonstrated once again their resilience especially considering the increase in supply.

AARR showed healthy growth (+1.1% to £151.45) for most London hotels. The top performing segment was townhouse and boutique hotels with rooms yield up by 7.9% to £255.03.

However, there are currently over 16,000 new rooms expected to be opened during 2017 and 2018, which will keep putting pressure on London hotels, which saw occupancy fall by 1.4% last year.

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Growth in the Edinburgh Hotel Market

The city’s enduring reputation as one of Europe’s top tourism destinations continues to be complemented by a multitude of independent awards, including being named one of the world’s most reputable and sustainable cities.

In 2016, Hotels in Scotlands capital city sold 82.3% of their hotel rooms, representing a 2.4% increase on the previous year, this number is forecast to increase by 1% by December 2017.

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Belfast Growth

Hotel occupancy in Belfast is running at 80 percent and currently, there are about 3,400 rooms. It comes as a new report shows 3,747 hotel rooms are now planned for the city centre. When all these new hotel developments are completed, it will double the number of hotel rooms in the city.

Among the 3,747 rooms, around 500 are part of the Titanic Quarter masterplan. The busy Titanic Quarter will get two new hotels, while planning has been granted for a 244-bedroom hotel in Hamilton Dock and work has already begun at Plater’s Yard on a 120-bedroom hotel.

Commercial property firm CBRE has launched a map of Belfast hotel developments and said that investors from Asia have shown a lot of interest in Northern Ireland. Some may be considering hotel projects.

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Rise in overseas visitors

Foreign spending hit an all-time high in the UK in 2016 and amounted to £22.1bn into the UK’s economy. It is expected that numbers of visitors will reach 38m in 2017 – the highest number ever.

A Boost from Staycations

The staycation’s popularity also continues to rise, with nearly a third (30%) of UK holidaymakers expecting to spend more of their holiday time in the UK this year. The convenience of holidaying at home is the primary draw. Half of UK respondents choosing the UK break to describe the familiarity of food, language, and travel options as making the UK ‘hassle free’ with 31 percent now more aware of UK holiday options.

Nearly four in ten respondents (38 per cent) of those citing cost as a factor behind a UK break say the weaker pound made holidays in the UK preferable to those abroad.

>Download Our 2017 Report On The UK Hotels Market<