Overseas visitor numbers grew for the eighth consecutive year in 2017 setting a new annual record at 38.9 million people, according to the Hotel Report 2018.
The report conducted by accountancy firm BDO, also found that daily room rates in the UK grew by 3.4% to £100.58, setting a new record and passing the £100 mark for the first time.
Additionally it revealed that London’s hotel segments experienced rooms yield growth in 2017 with the only exceptions being deluxe and superior deluxe hotels, whose declines in occupancy could not be overcome by the modest AARR performance seen in those segments.
The regional market saw a more consistent performance with all segments experiencing positive results. Country house hotels experienced the highest growth with rooms yield up by 3.6%, followed by £60-70 hotels, which saw rooms yield up by 3.3% as the UK benefits from the rise in popularity of the ‘staycation’.
There are currently over 21,700 rooms in the UK’s active hotel pipeline expected to open during 2018 and 2019, according to the report, with the volume of UK hotel transactions in 2017 also up approximately 44% compared to 2016.
This constituted 25% of total European single asset transactions and placed the UK at the top of the European rankings, followed by Spain and the Netherlands.
London continued leading the hotel transaction market accounting for over 63% (£1.7bn) of all single asset transactions in the UK.
Robert Barnard, partner at BDO, said: “2017 proved to be another year of consistent growth for UK hotels despite the uncertainties surrounding the exit of the United Kingdom from the European Union, as well as the terror attacks witnessed in London and Manchester. The country has experienced a boom in the tourism industry thanks to the weak pound, which has stimulated record-breaking visitor numbers.
“There will undoubtedly be challenges ahead. Rising payroll costs such as the National Minimum Wage, the Living Wage and increased pension contributions, will impact the bottom line for many businesses. However, hoteliers with robust business strategies will continue to plan and adapt to the changing environment.”