Pent up demand could fuel healthy UK hotel market in Q2/Q3

The 2020 health crisis hit the UK hotel sector hard and investment volumes were reduced by 70%. Knight Frank partner Henry Jackson explains that while in 2019 around £6 billion of assets were traded, in 2020 this figure fell to £1.8 billion.

Furthermore, £1.4 billion of that was transacted in the first quarter and about half of this figure was accounted for by a single deal, the sale of the Ritz hotel.

But, as Jackson explained to Real Asset Media’s Richard Betts, the current picture is not as grim as it might first appear.

Government support for hotels and other businesses in the UK meant that there were lower levels of distress than might have been expected, owners in London were well capitalised and able to cope, and overall the experience of the global financial crisis meant that owners were better prepared.

“What’s fundamental about the hotel sector is there hasn’t been a structural change like there has been in the retail sector, so the long-term prospects for the hotel market remain strong, we have a vaccine and as soon as lockdown is lifted people are going to want to get away,” Jackson said.

Click on the video to watch the full interview or listen via the podcast below.