Newcomers transform fortunes of West Hospitality scene
More than 20 hotels and pubs change hands as region draws buyers
Directors in Colliers International’s Bristol Hotels team look back on a very successful year for the West Country and Wales hospitality sector and predict an increase in the number of transactions within the industry in 2016.
The Hospitality industry has always attracted newcomers and they are returning to the market in droves now that the recession is behind us and banks are lending again.
But there aren’t that many quality properties to choose from across the region so this is looking like a particularly good opportunity for those thinking of selling.
“Sales are up but these are not the distressed sales we saw so much of back at the height of the recession,” says Simon Wells, a hotels director with sector specialists Colliers International.
“The majority are well established businesses which had been taken as far as the original owners had intended.
“I think it is simply that the market has firmed up after the general election and the pent up demand has crystallised in the last few months into sales.
“We are also seeing off-market sales which, by definition, people don’t hear so much about!”
He continued: “My colleague Peter Brunt has just sold one such pub in the Cotswolds and I have a couple of bites in my patch; one a hotel near Bristol and the other, a pub near Taunton.
“Volume is up but not racing away. Importantly, funding is up, with more people buying with bank finance which helps to support value and should now tempt some owners to come to the market.”
Simon Wells added the market had changed out of all recognition in just a couple of years.
“The wave of buyers simply seeking to pick up a good hotel on the cheap, have - predictably - come and gone. The hospitality sector continues to evolve with many owners taking stock after a good couple of years post downturn and deciding that the time is right. This creates opportunity for those looking to change their lifestyle and to move into business for themselves.
“It also helps that the changes in pension regulations allows buyers to use their assets more effectively for a better return, I have a buyer looking at converting his pension pot into a SIPP and then putting his cash to work for a better return.
“Operators are leaner and fitter than they were, and having steered their businesses back into profitability, many owners we are looking to take life a little easier. This creates opportunities for new owners looking to take a business forward and identify the further potential within the current offering.”
The firm has just enjoyed one of its most successful years, with the Hotels team in Bristol selling more than 20 hotels, with a further 11 imminent from the Bristol office with deals from Looe to Ryde, Dorchester to Winchcombe and across to Wales.
Simon Wells concluded: “With the market on the move there is plenty to look forward to in 2016!”