London hotels recorded continued strong growth in Q2 2019, as hoteliers pushed rates for visitors travelling to watch the ICC Cricket World Cup, according to the latest UK Hotel Market Tracker by AlixPartners.
In contrast, regional RevPAR decreased by 0.3% for the second consecutive quarter, even with numerous matches being hosted outside of the capital. According to the report, the combination of top line retraction, costs pressures, and “unrelenting” new supply is putting “significant” pressure on regional hotel margins.
Across the UK, only £360m of transactions were completed in Q2 2019. Transaction flow continues to be impacted by Brexit-uncertainty, with deals taking longer and longer to complete.
A statement by AlixPartners read: “£2.1bn of transactions were completed in London in the 12 months to Q2 2019, an increase of 54% on the previous year. This figure was boosted by the sale of the Grange portfolio in Q1 (£1bn) and the 163-bedroom Crowne Plaza Kensington in Q2 to a Singaporean consortium led by Heeton Holdings (£84m, or £513,000/bedroom).
“Q2 2019 was a slower quarter for hotel transactions in comparison to Q1, with only £360m of hotels being acquired – some £144m in London and £210m in the regions. The transaction market is suppressed due to Brexit-related deal reticence, with transactions either being put on hold or with some taking much longer to complete.”