Hotels UK
In this section, we explore the UK hotels market in 2024 within the context of the wider European hotel market, and provide predictions for the sector in 2025.
Market Overview
2024 was a great vintage for UK hotel transactional activity, with volume reaching 36% of total hotel deal volume in Europe up to the third quarter of 2024, positioning the UK as the leading market.
This resurgence in transactional activity was principally linked to several portfolios, such as Starwood Capital buying 10 Radisson Edwardian assets, Ares buying LandSec AccorInvest’s portfolio, Village hotels being acquired by Blackstone, Travelodge acquiring 66 freeholds from LXi REIT, Pandox buying a portfolio of three serviced apartments in London for £230m and most recently KKR and The Baupost Group acquiring a portfolio of 33 UK hotels from ADIA.
As a result, 74% of transactional volume in 2024 was portfolio-linked, and while single assets are still transacting, they only represented approximately £1.6 billion versus £4.8 billion worth of portfolios. Approximately 40% of the volume transacted in London versus regional UK.
The number of deals agreed and exchanged increased significantly from 2023 to 2024, a clear sign that the tide is turning and pipelines are growing. The recalibration of pricing and the softening of yields have been progressive since early 2023.
In addition to a slow deceleration in top line performance, the Autumn Budget announcements made by the Labour government are likely to put further pressure on operational margins during 2025. Interest rate cuts are likely to be slower than originally anticipated, possibly delaying material pricing changes. Whilst we are positive about deal activity for next year supported by strong pipelines, it is unlikely that similar levels of portfolio activity will be replicated.
Carine Bonnejean
Managing Director – Hotels & International
European Hotel Transaction Volumes
The UK has reclaimed its crown as the most active hotel transactional market, followed by Spain and France.
UK Hotel Transaction Volumes
UK Hotel Transaction Volumes - London and Regional UK £M)
2024 hotel transactional volume has been boosted by portfolio activity and has returned to 2018/2019 levels with approximately £6.4 billion.
UK Hotels Transaction Volume - Single Asset vs Portfolio Split
Unprecedented levels of portfolio deals led to a substantial increase in deal volume during 2024.
Christie & Co Deals Agreed/Completions
Price Index
Movement in the average price of sold hotels, year-on-year.
Market conditions improved, particularly towards the end of the year, with solid trading performances, more liquidity and more certainty around interest rates finally being on a downward trend. The impact of the Autumn Budget, particularly on increasing cost structures, has yet to transpire in pricing metrics.
Market Sentiment
We anonymously surveyed hotel business owners across the country to gather their views on the year ahead.
Market Predictions 2025
- Positive deal volume, but mostly through non-core disposals and individual deals as opposed to portfolio activity as seen in 2024
- Plateauing of top-line performance combined with cost pressures post-Budget announcements are likely to have a negative impact on profit margins overall
- Slow yield compression anticipated progressively throughout the year, linked to gradual interest rate cuts
- No material shift in development pipeline expected due to debt and construction costs
- Possible uptick in distress due to budgetary increases in payroll, pension and business rates
- Significant increases in luxury hotel supply, particularly in London, could put pressure on performance metrics
Case Studies
ADIA's UK Marriott Portfolio, UK-wide
Our brokerage team provided buyer-side advice to KKR and The Baupost Group, alongside their European hospitality platform Amante Capital, on their acquisition of a portfolio of 33 Marriott hotels in London and regional UK from ADIA.
Consultancy Project, Jersey
Our consultancy team conducted a comprehensive review of Jersey’s economy and tourism sector, comparing it with international destinations to provide the local government with strategies to revitalise the island’s hotel sector after years of supply decline. We conducted primary and secondary research, including interviews with key stakeholders, and our analysis covered tourism statistics, current and future industry trends, and best practices from international peers. This positioned us well to subsequently advise Ports of Jersey on developing a historic site by the harbour, incorporating feedback from international hotel investors, brands, and operators.
Hellaby Hall Hotel, Yorkshire
We sold Hellaby Hall Hotel to the Harrison family in an off-market transaction. We ran a confidential campaign and received over 40 signed non-disclosure agreements for this opportunity. The hotel achieved a sale price of £8 million, and we oversaw a tight legal process. With the help of other professionals involved in the deal the transaction concluded within four months from offer accepted to completion.
Major Transaction from 2025
| Date | Business | Purchaser | Details |
| Jan | Radisson Blu Edwardian Hotel Portfolio | Starwood Capital | Portfolio of ten Edwardian Hotels in London (2,053 keys), sold for circa. £800 million |
| Feb | LXi UK Travelodge Portfolio | Travelodge Hotels | The sale of 66 hotel freeholds and long leaseholds, for £210 million |
| Apr | ME London | Banco Santander | €300 million stake acquisition in JV owning three luxury hotels, including the ME London |
| May | Six Senses London | Gruppo Statuto | MARK and CC Land Holdings Ltd sold the Six Senses London for £180 million (£1.65 million per key) |
| May | Landsec AccorInvest Hotel Portfolio | Ares Management and EQ Group | 21 hotels (3,766 keys) sold by Landsec for £400 million |
| Jun | Village Hotels Portfolio | Blackstone | 33 hotels (4,405 keys) sold by KSL Capital Partners for £850 million |
| Aug | Portfolio of three London Aparthotels | Pandox | Three hotels (503 units) sold by Starwood Capital for £230 million |
| Aug | Motel One London Tower Hill | LaSalle Investment Management | 291-room hotel sold by abrdn for £56 million |
| Oct | hub by Premier Inn London, London Westminster St James’s Park, and Premier Inn Oxford Westgate | Clients of CBRE IM | Sale-and-leaseback of two trading Premier Inn hotels for £56 million at a NIY of 4.25% |
| Dec | Portfolio of 33 Marriott UK Hotels | KKR and the Baupost Group | Portfolio sold by ADIA for a reported £900 million |