Just 26 per cent of hotel sales in 2012 were distressed transactions with the vast majority of deals involving new entrants to the market or expansion by existing hoteliers, according to research by Colliers International Hotels.
 
The research by the specialist hotels team analysed buyer and seller sentiment and challenged the widely held belief that most hotels were sold by owners in a position of distress with just 26 per cent of deals emanating from administration or receivership.

Julian Troup, Head of Colliers International's Hotels team said: “Despite these extremely challenging times, we’re encouraged by the increase in the number of new buyers who saw the opportunity to invest in the hotel market after taking a long-term view on an improvement in real estate and recognising the immediacy of trading gains under their ownership”. 

“Although there continue to be sellers that have to dispose of properties for financial or health reasons, this was surpassed by those who made the decision to sell for reasons such as retirement, or a change of occupation. 
 
Julian Troup said the hotel sector was a major player in the UK economy, being the sixth largest employer and generating £115bn annually for the economy.
 
Colliers International Hotels research also revealed that an encouraging 34 per cent of buyers were new entrants to the hotel market.  Most of the remaining purchasers were existing hoteliers growing their portfolios or selling one hotel to acquire another or corporate buyers or sellers where the buyer planned a change of use.
 
In a forecast for the year ahead, Troup added: “2013 will be similar to 2012 in terms of the level of activity and prices achieved.  There are still buyers out there with cash or those supported by bank funding. We have also seen a marginal increase in private equity backed interest, together with new to the market buyers who see the opportunity to acquire and run a hotel underpinned by the comfort of alternative use in the event of the hotel venture not being to their liking.” 

He concluded: “Both buyer and seller sentiment was similar to the previous year although the banks, who are major influencers in our market, showed signs of accelerating the sales process whilst their colleagues in credit although remaining cautious did take a more realistic view on lending particularly to proven operators and better quality businesses.”
 
Despite the challenging trading conditions during 2012 Colliers International Hotels Agency team sold 96 UK hotels which set Colliers International apart from all the competition in terms of the volume of hotel transactional activity concluded during the period.