Register to get 3 free articles
Register to unlock the article and receive our free newsletter. Join 26,000 other hotel leaders and stay in the know.
Want unlimited access? View Plans
Already have an account? Sign in
UK hotel investment totalled an estimated £5.0bn in 2025, down 15% year on year but still above longer-term market levels, according to Savills.
The annual investment activity exceeded the 10-year average of £4.7bn by almost 8%, despite what it described as ongoing geopolitical and macroeconomic pressures.
Activity strengthened towards the end of the year, with investment volumes in the fourth quarter exceeding £2.0bn.
This was more than 40% higher than in the same period of 2024, indicating renewed momentum heading into 2026.
For the full year, portfolio transaction volumes fell sharply to just over £750m, compared with £3.1bn in 2024. Savills attributed the decline to a slowdown in large-scale portfolio sales.
By contrast, single asset transactions increased significantly, accounting for 85% of total investment volumes in 2025, up 68% year on year.
The activity in this part of the market was supported by investors breaking up portfolios acquired in 2024 and by strong liquidity for smaller deal sizes.
London outperformed regional markets, attracting £3.0bn of investment during the year, representing a 25% increase on 2024 levels and was 41% above the capital’s 10-year average.
Regional investment volumes fell to £2.0bn, down from £3.3bn the previous year, reflecting the reduced number of portfolio transactions.
David Kellett, head of hotel capital markets for Europe, the Middle East and Africa at Savills, said: “UK hotel transactions proved resilient in 2025 driven by a liquid single asset market, and the enduring appeal of London, which had its strongest year of investment volumes since 2018.
“Despite continuing cost challenges for hospitality businesses, we anticipate a strong year ahead in 2026 with more portfolio deals, building on the positive momentum in the fourth quarter of 2025.”
