Investment and demand in UK hotels remains strong, says Christie & Co

The hotel market is enjoying a “stellar” period according to business property adviser Christie and Co’s latest half year report.

The report provides an overview of the UK hotels market in the first half of 2018, reflecting on previous expectations, emerging trends, and any challenges facing the sector.

It says the hotel market is one of the few sectors to fully benefit from the response to the EU referendum, as the decline in sterling boosted leisure travel from Europe, the US and China; according to VisitBritain 39.9 million visitors to the UK spent more than £25bn in 2017 up 6.2% on 2016.

A weaker pound was found to have lifted the number of staycations, which drove up occupancy and RevPAR in London and UK holiday hotspots.

Christie and Co reported an estimated 19,000 additional rooms are to become available in the UK over 2017/2018, which hasn’t gone unnoticed by investors keen to capitalise on this increased supply and demand.

Additionally the property adviser said big ticket transactions are becoming increasingly frequent, with investor appetite “clearly geared towards more substantial deals”.

Despite growth in competition from alternative accommodation providers such as serviced apartments, hostels and aparthotels, Christie and Co said the report suggests there is still “exceptional demand” for traditional hotels.

The regions were found to have enjoyed a healthy RevPAR increase of 1.5% in the first five months of this year. Moving into the second half of the year, new openings in London are expected to account for a further 9,000 rooms.

Christie and Co said: “Undoubtedly the sector will face trading challenges due to cost pressures including staff wages, business rates, pensions, utilities and the cost of food. However, optimism is high about the market’s ability to deal with these challenges innovatively and investors continue to look for attractive opportunities.”

Christie and Co will release its 2019 Business Outlook, presenting an annual overview and year ahead forecast of all of its sectors including Hotels, in January 2019.

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