Regional hotels predicted to win RevPAR race in 2017, says Christie + Co

regions

The market looks healthy for hotels in the regions as we head into 2017, as RevPAR improvements are set to grow while London will struggle, according to the latest report from Christie + Co.

The report, which was released as part of its Business Outlook 2017, showed that the market for single asset regional transactions will also remain healthy, with Asian investors growing in importance as buyers of UK hotels both in London and the regions.

Whilst a number of private equity investors have moved their attention to the European markets, in 2017 there is predicted to be continued interest in the UK regional market and additional overseas inbound investment.

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However, as 90% of UK business property sales are still to buyers within the same geographic area, according to the report. This has meant that Brexit has had little impact on domestic transactions thus far.

Barrie Williams, managing director, hospitality at Christie & Co comments: “As a result of Brexit, the weak pound sterling is boosting inbound travel, investment and staycations, which are having a positive impact on hotel revenues both in and outside of London. While the market slowed in the months approaching the Brexit vote and transactions took longer to complete, price chips were undertaken and investor nervousness was seen in the immediate aftermath, activity picked up again towards the end of the year.

“Although the London hotel market has been impacted by global issues, the drivers in the regional UK hotel market remain positive and the market for single asset, regional transactions remains healthy. RevPAR improvements in the regional markets will continue to grow, albeit at lower growth levels, while London is likely to continue to struggle, principally due to increased bed stock.”

 

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