UK hotel investment market set for bumper 2022 driven by return of international visitors

22 November 2021 by
UK hotel investment market set for bumper 2022 driven by return of international visitors

Confidence in the UK hotel investment market is rising with the volume of transactions forecast to reach £4.5b in 2022, according to property firm Savills.

This would beat the 15-year average of £4.22b and demonstrate a growing appetite among investors for UK hotels.

However, there is already some recovery in the market with transaction volumes in 2021 set to total £4.1b, which is 78% higher than in 2020.

The return of international visitors could see revpar in London hotels rise to within 75% of pre-Covid levels by the end 2022, Savills has predicted.

Robert Stapleton, head of hotel transactions at Savills, said: "Activity in 2022 will be supported by more stock coming to the market and improving operational performance, particularly in London which has lagged the trajectory of the UK's regional markets.

"The return of international visitors has been long awaited and we are already seeing the positive effects that growing international arrivals are having on the hospitality industry."

Savills said environmental, social and governance (ESG) factors would become increasingly important for hotel operators, developers and investors in 2022 and beyond, with ESG compliant properties likely to see tighter yields due to a rise in demand.

Stapleton added that though there was a "weight of money" looking to be spent in the sector, recovery could be delayed by operational challenges and uncertainty around rising Covid rates in the UK.

Image: Vittorio Caramazza / Shutterstock

TagsHotels and Savills
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