Head of Colliers International Hotel Agency team Julian Troup recently predicted the UK hospitality industry will see an increasing number of buyers looking for hotels to acquire in the country. This year, there has been a drop in the number of hotel deals being completed, however, Mr Troup is confident this will change as we move into 2012. "One of the issues for the reduction in transactional activity has been the desire of many quality buyers to hold out to buy a quality business," he explained. When assets that do not meet these standards have been put up for sale, it is competitive pricing that has attracted investors, he added.
Mr Troup has observed an increase in the number of "new-to-the-trade buyers" entering the sector, which he believes is a result of higher unemployment leading more people to try to make a living in the hotel business. He added a similar trend occurred during the recession in the early 1990s, when professionals who lost their jobs in the service industry "chose the hotel trade as a viable means of alternative employment where they had control over their own destiny." Managing director of Soric International Mark Blick is also confident about the prospects for the UK's hotel sector in 2012.
He highlighted the continued expansion in the industry despite the recent recession, noting that even more rooms are set to enter the market in time for the Olympic Games next summer. "The UK in general over the last few years has remained one of the most active nations in terms of hotel acquisitions, especially single asset transactions," Mr Blick asserted. He added the sporting event and the good prospects of a strong performance in the hospitality industry are likely to encourage investors to consider UK hotels as a lucrative asset class. "The attractive performance statistics expected are likely to attract foreign direct investment from both high net worth individuals and also institutional investors," he stated.
- Tuesday 20 December 2011