UK hotel transaction activity reached circa £732m in Q3 taking the year-to-date figure to £4.7bn – a 181% increase on the same period in 2023, according to new data from Cushman & Wakefield.
The company said that although activity slowed slightly in Q3 compared with Q1 and Q2, where there was a flurry of large-scale portfolio deals, the sector is still on track to exceed £5bn by the end of the year.
Regional UK hotels have outperformed London hotels so far this year, achieving higher RevPAR growth. Yields have remained generally stable in 2024, with slight compression observed in top-tier deals within high-barrier markets. Cushman & Wakefield said it expects a gradual tightening of prime yields heading into 2025.
Jack Wallsworth, from Cushman & Wakefield’s hospitality capital markets team, said: “Although on face value the total deal volume for this year has been significantly elevated, when we strip out the larger portfolio trades activity has been more nuanced, reflecting the ongoing bid:ask spread and lack of quality single asset stock. With the summer now over and 2025 firmly in sight, the approach of both owners and buyers is certainly shifting.
“We’re now experiencing a greater bullishness to get deals done, fuelled by a greater meeting of minds between buyers and sellers on pricing, the ability to price in base rate compression, and the general resilience of hotel performance. Challenges of course remain, with many looking to the autumn budget for clarity on the path ahead, but on the whole the ‘wait and see’ sentiment is easing as positive conviction takes centre stage.”
