Over a third of hotel buyers in 2012 were new entrants to the market, according to the latest research from Colliers International. The 2013 Hotel Snapshot shows that 34 per cent of hotel purchasers had not previously owned a hotel, whilst the remaining purchasers were existing hoteliers growing their portfolios, those selling one hotel to acquire another and corporate buyers.
Julian Troup, Head of UK Hotels Agency at Colliers International said: “A number of new buyers are now realising the opportunity to invest in the hotel market having taken a long-term view on the improvement in real estate and recognising the immediacy of trading gains under their ownership.”
The report also reveals that hotel and leisure companies enjoyed an improved performance in terms of sales in 2012, with business closures down on 2011 figures. Just 26 per cent of hotel sales in 2012 were distressed transactions, and hotel and leisure insolvencies were down 18.7% in August 2012 compared to the previous year.
2012 was the second wettest year in the UK on record, affecting the whole of the country, yet occupancy increased by 0.6%. Demand from the corporate markets contined to fall but was replaced by a stronger demand from the leisure sector, including the ‘staycation’ market.
Troup continued: “Buyer and seller sentiment will greatly affect the flow of hotel transactional activity during 2013. In recent years we have seen a sluggishness and a reticence in terms of decisions being taken to sell hotels in the UK, but we expect an increase in activity throughout 2013 as a result ‘director fatigue’ setting in.
“Although many of the banks continue to have a watching brief over their hotel ‘book’ there are some positive signs that they are taking a more confident stance to lending. Whilst their colleagues in credit remained cautious, they did take a more realistic view on lending in 2012, particularly to proven operators and better quality businesses. We are not anticipating a rush to the market resulting in an over-supply of UK hotels. However, we do predict an increase in the number of ‘under the counter’ opportunities, where hotel owners are prepared to consider a sale on a confidential basis, which appeals to certain property investors.”