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Signs of “rebalancing” across the UK hotel sector were seen in 2023, with trading performance maintaining an “upwards, albeit decelerating” trajectory, according to a new report from Christie and Co.
The group’s ‘Business Outlook 2024’ report found that plateauing interest rates and inflation levels improved sentiment in the sector, providing the market with “some much-needed stability”.
Transaction volumes also improved from the summer onwards and resulted in a stronger second half of the year, in line with Christie and Co’s mid-year market predictions.
In addition, the bid-ask spread between sellers seeking value for strong trading performance and buyers having to factor increased debt costs into their pricing has narrowed.
Christie and Co also reported a “notable” increase in hotel deals agreed between H1 and H2 2023 of over 81% which will positively impact transactional volumes during 2024.
It added that a progressive uptick in distressed cases has emerged and “should lead to more consensual and forced sales during the course of this year”.
Carine Bonnejean, managing director of Hotels at Christie and Co, said: “Despite a softer transactional market during 2023, our UK hotels team continued to be the leader in hotel transactions, having brokered the sale of over 65 hotels last year.
“Additionally, we saw a notable increase in deals agreed during the second half of the year as well as an uprise in distressed cases which will boost investment volumes during the course of 2024. Activity has already picked up during the first few days of this year, with a call to action from owners and lenders in particular.”
