We are still seeing demand from existing operators and both UK based and international investors (European and Asian even in the regions). However, it is also very positive to see interest returning from first time buyers as well as those seeking a change of lifestyle post recession. Despite general concerns around the future impact of Brexit, the immediate benefit to the hospitality sector of increased tourism into the UK (from exchange rate movements), is resulting in good hotel operational performance.
What are they looking for?
For buyers looking for hotels and guest houses, location is a key driver at the moment in the South. Areas such as Brighton, Eastbourne, Canterbury, Tunbridge Wells and commuter belt towns particularly in Surrey and Kent continue to be in high demand. Properties based in more affluent towns or tourist locations where there is a strong property value remain popular and, depending on the type of buyer, there is demand for well established businesses but also those that require some investment to enhance the offering, such as refurbishment of wedding venues and expansion of the food & beverage offerings.
There are a variety of reasons as to why owners sell their hotels, although some at the moment are holding fire as business remains strong and they are enjoying the post recession growth. Otherwise there are off market transactions, portfolio transactions from private equity platforms and retirement/succession sales . Given high levels of investor interest in the sector, EBITDA multiples remain strong in the regions and it remains a good time for a seller to make a profit and exit the investment.