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UK hotel transactional activity is showing signs of a “normalised market” with £3.6bn of UK hotels having transacted in the first half of 2024, Christie and Co has revealed.
According to the Hotels 2024 Mid-Year Market Insight – which reflects on market activity and trends across the UK and European hotel transactional markets in the first half of 2024 – there is a significant increase compared to the £1bn recorded in H1 2023, leading the UK to reclaim its position as the top European hotel transactional market.
During H1 2024, Christie and Co completed over 40 hotels in the UK, double the figure achieved during the same period in 2023, demonstrating the uptick in transactional activity.
Valuation activity remained steady across the UK and Europe, whilst the European consultancy team delivered a number of “high-profile” strategic reviews, due diligence projects and operator searches.
Looking ahead, Christie and Co anticipates the progressive uptick in stock levels and transactional volumes to flow through during the second half of 2024 and into 2025, driven by refinancings and government contract withdrawals.
The hotel property adviser also expects to see continued polarisation of the market towards economy and luxury segments and for performance to plateau and profit conversion to normalise, particularly in leisure-led destinations and London.
It added that yields should remain “stabilised” and there will be a “big” emphasis on conversion brands to capture the independent hotel market with limited capex investment. Development will only pick up once financing and development costs become more affordable.
Carine Bonnejean, managing director of hotels said: “Across the UK and Europe, transaction volumes are on the up, particularly in the UK, after a challenging 18 months, We anticipate a very strong finish to the year with 70 UK deals in the pipeline. 2024 should be a much better vintage for hotel transactions and based on YTD figures, we can be hopeful that we should exceed levels seen since the pandemic.”
