UK Hotel Industry Forecasts Mixed Outlook for 2025, Survey Finds

• A survey of top executives in the UK hotel industry reveals that acquisition-driven growth is expected to accelerate in 2025.
• Despite some challenges, investors remain optimistic about the long-term future of the UK hotel market, with 72% of respondents expressing positive sentiment.

According to a recent survey of industry executives, the UK hotel industry is gearing up for a potentially mixed year ahead in 2025. Top priorities include managing cash flow, improving performance, and dealing with inflationary pressures. Despite these challenges, growth through acquisitions is expected to accelerate, and demand for hotels remains healthy, indicating a positive outlook for investors.

The survey also indicates a rise in strategic alliances within the industry, with 39% of executives expecting to form partnerships with other organizations. This trend reflects the industry’s need to pool resources, share expertise, and explore new markets in an uncertain economic climate.

Rising costs, labor challenges, and high interest rates are risks to the industry. Other emerging threats include political tension, cyberattacks, and overtourism. There are also concerns about long-term non-compliance with sustainability agendas and climate change disruptions.

Investment in the UK hotel market is expected to grow, with 59% of respondents believing it will increase significantly over the next five years. Edinburgh and Oxford remain the most attractive cities for hotel investment, while co-living is gaining traction as an attractive asset class.

Despite economic uncertainty, most respondents expect growth in Revenue Per Available Room (RevPAR) and Gross Operating Profit per Available Room (GOPPAR) in London and the UK regions.

Deloitte conducted the survey, which involved nearly 100 executives, including owners, operators, lenders, developers, and investors in the hospitality industry.

Visit Deloitte for more details.