Why hotel owners and operators should be looking up
Mark Worley, Director and Hotels specialist in the North East tells us why Yorkshire and Humber is the place to be for hotel investors and operators.
There is much to attract hotel buyers to “God's Own Country” and the surrounding areas.
Firstly, to appease those who wish to capture and capitalise on the tourism market, there are the National Parks on the wild and rugged North York Moors and the rolling splendour of the Yorkshire Dales as well as the stunning Heritage Coastline between Scarborough and Whitby. Not to mention the honeypot towns such as Harrogate and of course the capital of the county, York itself. In these locations, businesses are less reliant on high footfall and are typically privately owned country house hotels, boutique hotels and wedding venues and the buyers are usually private individuals or small expanding groups.
Humber also has its draws, with Hull operating as a key centre for the shipping industry and Humberside Airport welcoming flights from across Europe with new routes being announced regularly.
For the more corporate-minded purchaser there is a wealth of large towns and cities along the M62 corridor including Leeds, Bradford, Huddersfield and Halifax and the excellent road, rail and air links provide a significant pipeline of commercial visitors into the region.
Following the relatively slowing of the hotels market in London, investors are increasingly looking to both primary and secondary towns and cities outside of the Capital in order to make their returns on investment.
Looking at the latest AM:PM data for the region, it seems like both the current supply and forthcoming pipeline of hotel rooms in the area being dominated by budget brands, with both Premier Inn and Travelodge planning to increase the number of rooms they have in the area, albeit at a low level. That said, at Christie & Co, we have recently completed deals on behalf of upmarket brands such as Hilton and De Vere, which are looking to expand their presence in the region and also for Holiday Inn at the mid-range.
The majority of the sizeable hotel deals undertaken by Christie & Co over recent months have been for these larger corporate clients. The demand for these larger urban sites of 60 bedrooms or more is high and we find that the buyers are either UK based hotels groups or more commonly recently, from overseas, typically from India, China and the Far East.
These investors are looking for locations where they can guarantee a steady flow of visitors – both tourist and business – in order to keep their hotels well occupied. Cities like Sheffield and Leeds see high footfall from business travellers, York has a high number of tourist users.
In both the privately dominated rural market and the corporate driven urban market, profit is still the key driver for buyers. Location, condition, reputation and potential are all still important factors and are indeed key selling features however all buyers, whether individuals or corporations, primarily purchase hotels for one reason - to make money. “God’s own country” appears to be on investor and operators radars to do just that.