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RevPAR growth in the UK’s top 10 cities and hotel markets surpassed both 2022 and pre-pandemic 2019 levels during H1 2023, according to a new report by Christie and Co.
The hotel property adviser’s UK Hotel Market Snapshot report revealed that this RevPAR growth was led by Edinburgh and Belfast in the North of England and London and Birmingham in the South.
The report also showed that, while the development pipeline has been delayed in recent years due to the pandemic, an uncertain economic environment and rising interest rates, nine of the top 10 UK markets could see their hotel room supply grow by more than 12% over the next few years.
According to Christie and Co, this confirms the “enduring” appeal of the UK hotel sector to both domestic and foreign investors, and their trust in investing in regional UK cities beyond London.
Meanwhile, transactional volumes across the top 10 cities also reached £567m in H1 2023, which was just over half of the volume recorded over the same period in 2022.
Carine Bonnejean, MD of hotels at Christie and Co, said: “Sales over the first half of the year, which were largely dominated by single-asset transactions, were constrained by accumulating headwinds leading to a price gap between sellers and buyers.
“The opposing forces of continued trading performance elevation and increased financing costs have largely underpinned this gap. However, there is evidence that the gap is narrowing which will allow deals to accelerate in the coming months.”
Pierre Ricord, head of consultancy of hotels at Christie and Co, added: “We are pleased to report the encouraging performance levels seen across the top ten UK markets in the first half of 2023 via this publication, reaffirming the hotel sector’s resilience and remarkable ongoing recovery.”
