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The Top Hotel Investment Locations UK Index

The United Kingdom is become one of the most popular destinations for those who want to enter into the property investment market by becoming one of the increasing number of people who are considering hotel property investment as the first step on the real estate investment ladder. The emergence of the global economy from the doldrums of the global economic downturn has reignited the tourism and business travel market – and the U.K. (with London leading the pack) has once again become one of the most popular destinations for both tourists and business travelers.

This revitalisation of the global travel market has seen new hotel development keeping pace with the growth. In fact the new build in the hotel industry is growing at an impressive pace. For instance in 2018 around 21,000 new rooms were added to the U.K. hospitality inventory – and this robust growth of over 3% year on year seem to be accelerating rather than slowing. The fastest growing sector of all is that of budget hotels – meaning that the barriers to entry as far as the cost of acquisition is concerned are lower than ever – and represent an excellent opportunity for first time property investors.

Given this state of affairs it is no wonder that investment in hotel property is also showing robust growth. However, given the increasing choice – what are the top hotel investment locations UK?

It almost goes without saying that the jewel in the crown of hotel property investment locations is London. By 2018 London had seen an increase in new rooms of around 70% year on year – and the forecast is that growth in hotel rooms going forward will be in the region of 5% per annum. If there is one city in the United Kingdom that is almost guaranteed to provide the hotel property investor with exceptional returns it is London.

However there are other cities in the U.K which have been identified by property analysts as providing the hotel property investor with the opportunity to obtain a superior return in investment. These cities include Inverness, Edinburgh, Brighton, Cardiff and Liverpool.

There are new investors who may be worried about the impact of the increasingly complex Brexit issue might have on the hotel market. However, many pundits are convinced that the Brexit issue will not have any lasting impact on the attractiveness of the hotel property investment sector. According to many analysts demand will stay vibrant and if there is one restriction on the growth of tourism related to the hotel market it is the fact that supply is restricted – even as new builds accelerate. This in effect means that demand for beds is high and seems set to remain high – once again making hotel property investment even more attractive.

A recent survey of current hotel property investors in the United Kingdom showed that 94% of respondents would either be matching or alternatively increasing their exposure to this sector – given that statistic it might just be time to seriously investigate top hotel investment locations UK.

How Does Hotel Investment Work? A Unique Investment Opportunity

Hotel investment is not really a new concept and the way it works is not actually unique in the investment arena. However, these types of investment opportunities seem to be popping up more regularly and are becoming more popular among all kinds of investors.

But how does hotel investment work?

The basic concept is that an investor will purchase a portion of a hotel or resort (for example a room) from the hotel operator for a specified period of time – similar to a lease-hold property purchase – and then leases it back to the operator. During the period of “ownership”, the investor will receive a fixed percentage return on the investment benefiting from both the income that the hotel generates as well as growth. When the period expires, the operator will then purchase the property back from the investor, usually at a slightly higher price than the investor paid for it at the outset.

So why do operators choose this type of investment to acquire capital?

Banks and other financial institutions are often not inclined to provide financing for the purchase or development of leisure real estate such as hotels and resorts. This means that property developers or hotel operators often need to look for other means to accumulate the capital that they require for the development and/or purchase of the property. This is where private investors come in and this can be a very financially viable opportunity for individual cash investors, pension investors as well as group investors or companies.

What are the risks involved?

Like any type of investment, there are risks involved with this type of opportunity. However, understanding how does hotel investment work and ensuring that the operator is financially stable and a healthy company can reduce the risks. It is also recommended to choose an operator that has been in the industry for a while and has a good track record in providing hotel investment opportunities.

Hotel Investment For Sale UK – How To Find Opportunities

Looking for opportunities in hotel investment for sale UK?

Hotel investment is a relatively new concept based on other types of real estate investment and has resulted from investors in leisure property needing to raise capital for the purchase and/or development of a hotel or a resort. Banks often do not provide loans for these types of property purchases or development providing huge opportunities for the public to invest in the hotel industry and make relatively quick and profitable investments.

But where can you find a hotel investment opportunity and what should you look for in a operator or property investment provider?

Going online is of course the best way to find multiple opportunities for these types of investments. The popularity and profitability of these investments has led to real estate and property investment companies jumping onto the band wagon and the availability of hotel investment for sale in UK is on the rise. However, while finding an operator is quite easy, ensuring that you are making a sound investment with a reputable company is a little more complicated.

There are two ways in which hotel investments are profitable. Firstly, you will receive a percentage of the profits and benefit from growth. Secondly, the operator will “buy back” your investment portion after the specified lease period has expired, usually at a higher price than you initially paid for the investment. It is important to ensure that the operator you choose provides both these returns and compare percentages between different providers in order to get the highest return.

The greatest risk that you run in this type of investment is that the company buying or developing the hotel may go under. It is therefore critical to research the company and ensure that they are financially stable and that this is not their first time around the block. A company that has a good track record in hotel investment for sale UK is the best option.

It is also recommended to check whether the investment opportunity is SSAS and SIPP compliant. These investments are not regulated by authorities such as the FCA and the Financial Services Compensation Scheme and you will have little recourse if the investment goes south.

Most operators and investment providers offer a guaranteed returns which is another factor to look for when choosing the investment company. It is also advisable to do a little research into the hotel that you will be investing in, its location and history.

What To Know From The Best Hotel Investment Guide

You always have to find a way to make good investments for the returns to be fruitful. Hotel room investment has been on the rise over the years and this is due to the appealing and attractive market that it has. This sort of investment is different from conventional property investments in that the investor buys property managed by another entity and is paid a fixed percentage rate irrespective of the performance of the room at the end of the fiscal year. There is usually a buyback clause where the investor can the sell the room back for a higher price than the initial price. For you to enter this market you need to follow the best hotel investment guide book for the whole venture to be smooth sailing boat. So this is what to look out for.

Demand

With the rise in the economy and travelers, there has been an increase in demand for hotels. An investor needs to be aware of all the trends happening seasonally for them to get in the deal early enough. International tourists trends are really important to note and with more attractions, the influx of travelers will always be at an all-time high year round for a given place. It’s not difficult to find an area with this sort of demand when you follow the best hotel investment guide.

Luxury Hotels

Definitely the best place to start your search. People generally love living in lifestyle or aspire to be. So it’s not surprising to see an influx in this sector. Travelers want awesome experiences and that personal service that makes them feel pampered. That is why many people take vacations and a hotel that has gone all out on their designs and decorations will definitely have traffic in their hotels. Modern boutique and lifestyle hotels have up the ante providing intimate services that are complemented with beautiful and unique hotel designs that really give futuristic aesthetic. You should really target a lifestyle hotel investment since this is where the market is right now.

Potential Drawbacks

You need to be aware of what you getting in to. Investment is a risk that may or may not yield returns. There is no worthwhile investment without its share of challenges. This field is no different and a good investor always need to weigh their options before pulling the trigger. Ways the success of the hotel can be determined include things like terrorism, economy and even acts of God. Management costs are deducted and you have no say as to the direction the hotel. With good management, this isn’t likely to happen and going for a competent company can really yield profits which is the ultimate goal.

The reason why this sort of investment has been increasingly popular is due to their attractive returns, cut-rate entry levels, full management, and their hands-off nature. By following the mentioned guides you will for sure find the best company to back. This sort of investment only works if you do your research right and just be strategic.