UK hotel transactions hit six-year high as investor confidence returns

UK hotel transactions more than doubled last year to hit £5.75b, as private equity firms showed a renewed confidence in the sector.

It marks the highest level of activity in the hotel market since 2018, according to Savills research.

This was largely driven by portfolio transactions, which accounted for 55% of total investments, equating to £3.14b.

Portfolio deals last year included private equity firm Blackstone’s reported £850m acquisition of Village Hotels and the sale of 33 UK Marriott International hotels to investors KKR and Baupost Group in December.

Portfolio volumes grew by 582% year-on-year, reflecting the subdued levels of activity seen in 2023.

Regional hotel transactions totalled £3.34b in 2024, representing 58% of total volumes. This marks a 217% year-on-year increase and is 24% above the 10-year annual average.

London also saw significant growth, with transaction volumes rising by 105% year-on-year to £2.40b in 2024, following a steady 17% year-on-year increase in 2023.

Tim Stoyle, head of UK hotels at Savills, said: “In 2024, the UK hotel market demonstrated resilience, with investment activity resurging. Private equity confidence has been central to this recovery, with significant investments made by Starwood Capital, Blackstone and KKR as well as a number of others.

“The sector’s strength is supported by solid fundamentals, including its role as a robust inflationary hedge, its resilience as an asset class, and its continued international appeal.”

Hoteliers have shared their 2025 predictions with The Caterer while a variety of new hotels are set to open in the UK this year.