London Remains Top Hotel Investment Pick In Europe

For the second year in succession, London has been voted the most attractive hotel investment destination in Europe, according to a survey of senior hospitality industry figures by Deloitte, the business advisory firm. 

Almost a third (31%) of respondents ranked the UK’s capital as the number one hotel investment destination in 2016, ahead of joint-second Barcelona and Madrid (both 27%), which were narrowly followed by Amsterdam (26%). Paris slipped to fifth place after being second last year. London’s ranking comes despite more than half of respondents (57%) regarding the city as being ‘overvalued’.

Nick van Marken, global head of hospitality at Deloitte, commented: “London is again the standout. Some 2,500 luxury hotel rooms alone have been announced as opening by 2021, with an investment value we calculate as in excess of £3bn. When you consider all the other hotel projects, the total investment pouring into the city is phenomenal.

Outside London, Scottish cities ranked in two out of the top three regional UK investment destinations. For the second year in succession, respondents named Edinburgh (47%) as the most attractive investment destination in the regions, followed by a Manchester (40%) and Glasgow (23%).

Two-thirds (64%) of industry leaders expect regional RevPAR to grow in the region of 3-5% in 2016. 

The rise in labour costs is anticipated to be an issue for regional UK hoteliers in the next 12 months (53% of respondents). New hotel supply (42%) and the possibility of an interest rate rise (33%) were also cited as potential threats to the UK regional market.

Despite this, over a third (34%) of industry leaders expect to see price multiples of 12 times or more in the UK regions, further supporting the view that the health of the regional UK hotel industry is currently very strong.

This is a summary of an article published by Deloitte on 4 November and you can read the full article here.