Despite “growing operational costs” and “concerns over staff recruitment in post-Brexit Britain”, the UK hotel market showed “encouraging signs of growth” in 2018 which looks set to continue in 2019, according to the latest annual report by Christie & Co.
The report, ‘Business Outlook 2019: Navigate, Innovate, Accelerate’ forecast that RevPAR growth in both London and the UK regions would be steady, with growth of +0.6% and +0.7% in London and the regions respectively, between 2018 and 2019. Supply was also found to show healthy increases, with many of the major British cities such as Manchester, Belfast and Edinburgh seeing “strong” pipelines in the year ahead.
The report also found international investment continued to be a key driver, with Christie & Co identifying capital from across the globe, particularly from European investors making up more than 50% of UK investment in 2018. Average prices also remained economically positive throughout 2018 with hotels seeing a 4% increase.
Brexit was identified as a “pivotal factor” for businesses within the hospitality sector in the UK, which employs around 400,000 EU migrant workers, and Christie & Co said any changes to immigration policies “could have a notable impact”.
Looking to the year ahead, the report outlined Christie & Co’s market predictions; flat or negative profit growth for some operators due to higher costs, a potential increase in distressed positions in the second half of 2019, and new developments in technology being implemented to improve customer service and productivity.
Barrie Williams, managing director – hospitality at Christie & Co said: “The UK hotel market remains an attractive investment proposition and appeals to a wide range of buyers. Christie & Co continue to see many opportunities for value creation in the hotel market and across brokerage, valuation and consultancy, we are well placed to provide all types of investors with advice.”