Colliers International - Hotels has experienced a 28 per cent uplift in UK hotel transactional activity in the 12 month period to July 2013 when compared to the same period of the previous year. Julian Troup, head of Colliers International hotels agency, said: “We have seen an uplift in the level of demand from private and corporate buyers looking to invest in UK hotels.”
“There are reasons for real optimism in terms of the transactional activity taking place in the UK hotel market - contrary to the belief of some - we, at Colliers International, are remaining busy and productive, in the 12 months to July 2013 we have sold or acquired 91 hotels and hospitality businesses with a combined value of in excess of £150,000,000.”
In terms of corporate interest, there is a clear movement from institutional, investors and private equity backed buyers keener to consider the more attractive pricing of larger provincial hotels when compared with full prices that continue to be obtained for hotels in and around London.
Alistair Letham, Director of Colliers International hotels agency in Scotland, added: “We are expecting a continued increase in hotel sales transactions in Scotland for the remainder of 2013, in part spurred on by the likely increase in distressed sales, improved availability of funding and continued acceptance of market realism. Perhaps a more significant factor is that around half of these sales were to first-time buyer operators.
“We recently marketed three hotels on Skye for sale and received nine offers, all within eight weeks of market launch. This was echoed earlier with the Watermill Hotel, Paisley, when seven offers were received at a closing date. Interest is coming from local buyers, as well UK-wide and overseas, with many now ‘shopping’ with significant cash investment.
“Properties that offer good value of price as a ratio against turnover also attract good and, often, quick interest as has happened with the Craw’s Nest Hotel, Anstruther, which saw an offer tabled within less than a week of going to the market.
“A further encouraging sign is that hotel development is back on the agenda in Scotland which, coupled with the buzz around the 2014 Commonwealth Games and the Ryder Cup, provide a welcome boost to the hotel sector.
“In recent years, Colliers International has witnessed an ever-increasing number of hoteliers concentrating on generating more profitable business; coupled with improved cost control. As a result, even those hotels where revenue is flat-lining are now showing an increase in profit margins, which is helping to underpin values and prices currently being achieved. 
“Additionally, in recent months, the staycation trend and the hot summer has improved investor confidence, as we’ve seen an increasing level of enquiries for leisure based UK hotels.“