UK Hospitality Marketbeat Reports

KEY TAKEAWAYS FOR Q1 2025

• Investment Activity: UK hotel investment volumes reached £0.5 billion, marking a 72% year-on-year decline, primarily due to the absence of large portfolio transactions.
• Prime Yields: Yields have remained stable in the early stages of the year, however these can be expected to sharpen as financing conditions improve, alongside a closer alignment in pricing between market participants.
• Supply & Demand:  Hotel supply has continued to expand, albeit modestly compared to historic growth, with a 1.3% increase year-on-year. Demand growth has outpaced supply, having undergone a 1.6% growth year-on-year, supported by the rebound of group and corporate travel.
• Performance: Hotel performance has remained stable with a slight decline of 1.1% in RevPARs year-on-year. Other pressures, such as the cost of labour and the rise in national insurance costs are expected to widen the gap between RevPAR and GOPAR in 2025.
• Future Projections: Demand is projected to remain robust in 2025, supported by the rebound in group and corporate travel with domestic spend on accommodation expected to increase 6% by the end of year. International travel is also expected to increase 12% by year-end, a positive indicator as the post-covid boost stabilises.