Hotel hotspots for 2017 – what’s around the corner for the UK’s hotel sector?

Hotel hotspots for 2017 – what’s around the corner for the UK’s hotel sector?

  • Regional hotels to hit record-breaking 77% occupancy in 2017 (PwC)
  • Brexit creating double boon for UK hotel sector (Properties of the World)
  • 10.45 million overnight trips made by Brits to Wales in 2015 (Welsh Government)

Britain’s hotel sector has been riding the wave of the Brexit vote for three months now, with domestic staycations on the up and many European travellers rushing to the UK as a result of finding their euros are suddenly go a lot further.

But will the trend last? Are hotel investments a wise move as we head into 2017?

The latest industry figures and projections certainly seem to indicate that the hotel sector – at least in certain areas – is looking forward to a strong 2017. PwC has projected record occupancy levels for regional hotels over the year ahead and revenue per available room (RevPAR) of 2.3% even in the face of the anticipated economic slowdown. An increase in domestic travel and the weak pound has led the company to predict a record occupancy of 77% for provincial hotels during 2017.

Figures from ContentSquare highlight the increased European appetite for British hotels, one of the driving factors behind the rosy outlook for the sector. Their analysis has shown that the average spend on holiday packages to the UK booked through online travel agents by Europeans following the Brexit vote rose by 38%, while searches for UK destinations increased by 10%.

The UK hotel sector is certainly working hard to respond to the increased demand. STR’s August 2016 pipeline report revealed that the UK has more hotel rooms under construction currently than any other country in Europe. Meanwhile figures from AM:PM have shown that the number of new hotel rooms opening in the UK in 2016 looks set to reach its highest level for four years.

Jean Liggett, Founder and Managing Director of Properties of the World, which is offering hotel room investments at Caer Rhun Hall Hotel in Wales from £75,000, emphasises the dual role that Brexit has played in boosting the sector,

“The impact of Brexit has been a double boon for the UK’s hotel industry. European visitors are keen to head to the UK while it’s cheaper for them to do so and cautious domestic holidaymakers are opting for staycations while they wait for the Brexit dust to settle. Spikes in demand from two different sources are always good news and the hotel sector, particularly in the regions, is looking forward to a strong year ahead in 2017.”

The first rooms at the stunning, grade II listed Elizabethan-style Caer Rhun Hall are due to come online in 2017, with investors able to choose from 14 room types with returns of circa 10% per annum. The lack of stamp duty on hotel room investments has made this a popular asset class, particularly as the UK’s stamp duty changes earlier this year made buy-to-let investment a less profitable venture than once it was.

Wales is certainly a popular destination for staycation-ers in the UK. British residents made 10.45 million overnight trips to Wales during 2015, 60% of them for a holiday according to government figures, with an associated spend of £1,975 million. Wales also welcomed 970,000 visitors from overseas during 2015, with an associated spend of £410 million.

“Look at it from any angle and hotel investment makes sense right now, particularly regional hotel investment” concludes Properties of the World’s Jean Liggett. “London may be facing declining occupancy and decreasing RevPAR over the coming year, but it’s full steam ahead in the regions for the foreseeable future!”

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