The UK recorded the highest volume hotel deals of any European country in 2020 at €2.3bn (£1.9bn), marking a 58% decline from 2019, according to newly released data from Cushman and Wakefield.
The group also revealed that while total investment volumes for the European region declined by 63% compared to 2019, there were still over €10bn (£8.6bn) worth of deals closed in 2020.
Last year, the European hotel market recorded nearly 400 transactions, comprising about 48,000 rooms – of which almost 43% of deal volume was committed to after the pandemic outbreak.
Jon Hubbard, head of hospitality EMEA at Cushman and Wakefield, said: “The hotel sector across Europe has been hit hard by Covid-19 lockdowns, which have understandably resulted in a sharp drop in investment volumes.
“However, the hotel industry is unique in that, for the most part, there is not a viable virtual pivot for travel and tourism – there will always be a need for hotel accommodation. Investors recognise this, and their sentiment for the sector remains positive for the medium to long term.”
The group suggested that over a quarter (26%) of deal volumes in 2020 were in development or conversion projects as opposed to operating assets, compared with 12% in 2019.
Hubbard added: “We’ve recently seen this in the UK, with spikes of enquiries to holiday companies following the publication of the British prime minister’s roadmap out of lockdown. With cities unlocking too, more business travel is set to be on the agenda and larger-scale events like conferences will follow.”