UK Hotel Industry Poised to Smash £5 Billion Investment Milestone by Year’s End

• UK hotel investments have seen a dramatic surge, reaching £4.7 billion by Q3 2024, a 181% increase from the same period in 2023. 
• The investment momentum is expected to continue into 2025, with full-year 2024 deal volumes predicted to exceed £5 billion.

UK hotel investments have skyrocketed, with transaction volumes reaching £4.7 billion in Q3 2024, marking an impressive 181% increase from the same period in 2023. According to Cushman & Wakefield, this momentum is expected to continue, with full-year 2024 deal volumes predicted to surpass £5 billion.

Most of the Q3 deals were single-asset transactions in London, representing 51% of total deals. Edinburgh and other UK regions also contributed to this growth. Notable transactions included Pandox’s acquisition of three London aparthotels and Millemont Capital Partners’ purchase of Yotel Edinburgh.

Investor confidence remains high, buoyed by continued demand growth and deal activity projections. Forecasts suggest a RevPAR (Revenue Per Available Room) growth of 4.5% in London and 5.1% UK-wide over the next 12 months.

Despite these strong figures, translating top-line growth into profitability remains a challenge. Many are looking to the upcoming budget for support with business rates and clarity on employee wage growth.

The outlook for the rest of the year remains strong. The anticipation of more quality stock on the market, declining interest rates, and improving clarity in pricing is expected to fuel momentum into 2025.

Despite some challenges, the ‘wait and see’ sentiment gives way to positive conviction. As the year draws to a close and 2025 comes into focus, owners and buyers show increased eagerness to finalize deals, underpinned by the resilience of the hotel performance.