Christie & Co’s UK Hotel Market Snapshot H1 2023 reaffirms the sector’s robust recovery post-pandemic

The report reveals that RevPAR growth in H1 2023 surpassed both 2022 and pre-pandemic 2019 levels across all ten markets, led by Edinburgh and Belfast in the North of England and London and Birmingham in the South, clearly demonstrating the hotel sector’s continuous and robust recovery post-pandemic.

The snapshot also shows that while the development pipeline has been delayed in recent years due to the pandemic, an uncertain economic environment and rising interest rates, nine of the top ten UK markets could see their hotel room supply grow by more than 12% over the next few years. This confirms the enduring appeal of the UK hotel sector to both domestic and foreign investors, and their trust in investing in regional UK cities beyond London.

According to the report, transactional volumes across the top ten cities reached £567 million in the first half of 2023 which was just over half of the volume recorded over the same period in 2022.

Carine Bonnejean, Managing Director - Hotels at Christie & Co, comments, “Sales over the first half of the year, which were largely dominated by single-asset transactions, were constrained by accumulating headwinds leading to a price gap between sellers and buyers. The opposing forces of continued trading performance elevation and increased financing costs have largely underpinned this gap. However, there is evidence that the gap is narrowing which will allow deals to accelerate in the coming months.”

Pierre Ricord, Head of Consultancy – Hotels at Christie & Co adds, “We are pleased to report the encouraging performance levels seen across the top ten UK markets in the first half of 2023 via this publication, reaffirming the hotel sector’s resilience and remarkable ongoing recovery.

“The events of recent years have noticeably delayed the pre-pandemic pipeline of new hotels, which will have facilitated the recovery of hotel KPIs. Nevertheless, the development pipeline remains active with c. 35,800 rooms planned to enter the top ten cities. This is expected to positively contribute to the renewal of ageing stock, with six out of the ten markets under review noting 50% or more of their inventory as being 10 years or older.”

“Christie & Co’s European Hotel Consultancy team has experienced a busy year to date, with great diversity in the nature of our engagements and that of our client base, confirming an ever-widening spectrum of investors interest in the hotel sector but also making the most of our regional and pan-European capability. Projects so far this year have spanned from market research, feasibility studies for new developments, underwriting in support of refinancing exercises, as well as acquisition-led commercial due diligence assistance all the way to bespoke strategic advice.”

To read the full report, click here: UK Hotel Market Snapshot H1 2023

For further information on this press release, contact:
Bronte Hughes, Corporate Communications Manager
M: 07721 420 656 or E: bronte.hughes@christie.com

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