Today’s news in brief – 29/2/24
The South hotel market continues to thrive, buoyed by a resurgence of cash buyers in 2023, with over 25 properties sold, totaling £51.1m. Notable deals include the Norfolk Royale Hotel, the Royal Hotel in Weymouth, and the Grand Atlantic Hotel. Cash buyers dominated, but funded buyers are reemerging, anticipating lower interest rates in 2024. The region’s popularity, boasting coastlines, sunny resorts, and historic sites, makes it an attractive destination for investors. The South Hotel team anticipates continued buoyancy in 2024, with strong interest from buyers and positive market indicators.
Dalata Hotel Group reported a 22% increase in EBITDA to €223.1m (£191m), with revenues rising by 18% to €607.7m (£519.8m) in 2023. Despite a 4% decline in pre-tax profit, the group invested in London assets and Edinburgh building conversions. It also secured a lease extension and planned expansion for Clayton Hotel Manchester Airport. With new centrally located hotels slated to open in London, Liverpool, Brighton, and Manchester, the group aims to surpass 5,000 UK rooms by 2024.
The UK hotel sector saw a seasonal decline in January, with occupancy and average daily rates dropping after a strong December. Labour costs rose, impacting profitability, exacerbated by the upcoming national minimum wage increase. Gross operating profits fell significantly compared to pre-pandemic levels, posing challenges for the sector. Hospitality leaders urged the Chancellor to take action at the upcoming budget to prevent further business failures, citing rising costs, labour shortages, and the need for government support.
Hospitality CEOs, including those from Mitchells and Butlers, Accor Hotels, Stonegate Pubs, and Crerar Hotels, penned an urgent open letter to the Chancellor, calling for immediate action in the upcoming budget to avert further business failures. Citing rising costs, labour shortages, and closures, they underscored the sector’s critical role in communities. The letter coincides with data showing widespread consumer support for government assistance in the hospitality industry. Signatories advocate for measures including capping business rate increases, lowering Employer National Insurance Contributions, and reviewing VAT rates. UKH CEO Kate Nicholls emphasised the sector’s dire need for economic support to avoid irreversible damage.
