Is the UK’s hotel sector the next big property investment?


Short-term economic uncertainty, political uproar and frustration… these are definitely three things Britain’s Brexit vote kicked off. What it also brought, however, is a weak pound and a big interest from European tourists.

The country’s decision in the EU referendum to leave the Union once and for all has led to a dramatic drop in the value of the British Pound, leading a lot of European tourists to cease the opportunity and spend a couple of days in the country that’s just decided to divorce them.

PwC picked up on this trend and has published a study predicting an occupancy rate of 77% in rural hotels for 2017. On top of that, the study revealed record occupancy levels for rural hotels for this year and a 2.3% revenue per available room regardless of any mentions of economic slowdown.

With a series of changes already made to traditional buy-to-let investments (i.e. stamp duty surcharge) and more to come (i.e. changes to tax relief), savvy investors might start shifting their focus slightly.

Hotel investments are a niche in the investment market, one that might well be worth a consideration.

But what about long-term goals? Will the hotel trend only last while the pound is weak and soon all these hotel rooms won’t be needed anymore and the seemingly hassle-free, hands-off investment turns into a well-hyped, but little thought-through flop?

First of all, PwC’s hotel forecast for 2016 expects continuing growth from the sector. The forecast especially highlights regional hotel investments as a good bet.

Following on from 10.4% revenue per available room (RevPAR) growth in 2014 PwC expected a growth of 6.3% for 2015 and a further 4.2% in 2016. The slowdown in growth is not surprising, given the over 36 months of occupancy growth in the UK provinces since November 2012. PwC expected occupancy to hit 76.0% in 2015 and forecast 77.0% in 2016, which would be highest on record, driven partly by structural supply shifts towards a greater proportion of budget rooms.

Secondly, developers like Shepherd Cox, who mainly focus on regional hotels and rebrand them after purchase into luxury accommodation, offer investment with a low level of risk. With buyback options, monthly paid income and a globally recognised brand, investors might feel as safe as they can when weighing up options.

Whether or not to invest in hotel rooms is still a decision every buyer needs to make for themselves, but when it comes down to the numbers, hotels might currently give investors all they’re looking for.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Is the UK’s hotel sector the next big property investment?

Is the UK’s hotel sector the next big property investment?


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.