UK Hotel Investment

UK Hotel Investment
Regional 'hot' towns

17 October 2016, by Marie Hickey

What markets set to provide best growth prospects?


■ At the end of last year we released our list of the best hotel markets from an investment perspective. This took into account pricing (yield spread to previous 2006/07 peak) and the fundamental operational drivers going forward including forecast GDP growth, overnight visitor market, current stock and pipeline.

■ What the analysis highlighted was that it is not necessarily the obvious markets that offer the most attractive opportunities.

■ Nine months on, we have decided to update this analysis across 51 of the UK's largest hotel markets. However, this time we have excluded pricing and just focused on the fundamental operational drivers going forward.

■ The top 10 'hot' markets from this analysis are detailed in the table below. The universal feature of all those markets that made the top 10, bar Bristol, is that they are all sub-regional centres as no major regional cities featured. Although Cardiff, after Bristol, was the next highest ranking major city.

■ The real driver behind the top 10 is that they all have constrained levels of current, and future, bed supply relative to their overnight visitor market, plus strong GDP growth forecasts. For example, second placed Bristol has only 2.8 beds per 1,000 overnight visitors with this only expected to improve to 2.9 based on the known development pipeline, with GDP growth forecasts of 2.0% per annum through to the end of 2020. This constrained supply is apparent in its past operational performance with average RevPAR growth per annum of 12.0% between 2013 and 2015.


Top 10 Hot Markets

Source: Savills Research; AMPM; Oxford Economics; ONS


Key Contacts

Marie Hickey

Marie Hickey

Commercial Research

Margaret Street

+44 (0) 20 3320 8288


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