UK hotel investment reached £8.1b in 2015, just missing 2006's all-time high of £8.3b, according to international real estate advisors Savills, who said that 2016 was also set to be a strong year.
The figure fell just short of the £8.5b that Savills predicted in October for 2015, but was 31.6% higher than the investment for the previous year of 2014.
Transaction volumes in London doubled to £3.6b in 2015 compared to 2014, largely thanks to deals such as the £1.37b sale of the Maybourne portfolio, which included iconic London site Claridge's.
Conversely, the regional hotel market accounted for 55.6% of transaction volumes, which Savills described as "strong", although it was down on the 71% seen in 2014. Notable regional transactions in 2015 included the sale of the Hilton Newcastle Gateshead for around £37m and the sale of the Cambridge City Hotel for £61.5m.
Overall, the market was dominated by portfolio transactions, accounting for 59.3% of volumes in 2015, up from an also significant 52.9% in 2014. Key examples of these included Lone Star Funds' acquisition of a portfolio of 22 Mercure-branded hotels as part of its £1b acquisition from Moorfield, and Fraser Hospitality's £363m purchase of the Malmaison portfolio.
Robert Stapleton, hotels director at Savills, commented that the firm expected London to continue with its strong growth, albeit at a slower rate, and also see an increased transaction volume from overseas investors. He added that the regional markets would continue to improve.
He said: "We expect 2016 to be another strong year for investment into the UK hotel market. We are still experiencing growth in demand for regional assets from investors seeking higher return profiles."