London experienced a 2.8% fall in hotel values during 2016, with the capital recording performance growth in only November and December, according to the new European Hotel Valuation Index, published by hotel consultants HVS.
Despite the fall in the value of sterling following the European Referendum in June, the expected boom in visitor numbers did not immediately materialise. Occupancy levels in London was also negatively affected by a substantial influx of new room supply, while luxury hotels continued to experience a fall in spending following terrorist attacks in Paris, Nice and Brussels.
However, investment in London did not come to a halt, with activity returning in the second half of 2016 after a slow start to the year.
Manchester hotels led the growth in regional values, up 8.5%, with Edinburgh and Birmingham recording an increase of 5.3% and 5.1% respectively.
Edinburgh benefitted from a 7% growth in revenue per available room (revpar) due to strong leisure business and the expansion of its airport, which enjoyed a 11% growth in passenger numbers.
Birmingham also performed well and built on a strong performance during the Rugby World Cup in 2015, with the number of overnight visitors doubling in three years to 45%.
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