The investor perspective

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The investor perspective

[Credit: Fabian Blank on Unsplash]

It’s been a hot week for hotel investment – a welcome sign that the market is beginning to bounce back. Some major stories this week include KSL purchasing the parent company of The Pig Hotels and Minor International acquiring 100 per cent of Corbin & King’s assets. Most recently, Tristan Capital Partners has bought a majority stake in Point A Hotels.

When TCP acquired a hotel in Manchester late last year, Kristian Smyth executive director of investments said the company is planning to invest “in excess of €500 million over the next 12 months” focussing on the UK and Spain. TCP has evidently spied opportunity in the budget boutique hotel space, buying the Point A portfolio for £420 million with plans to double its size in the medium term.

The attractiveness of the hospitality sector is strong. Revenge travel is helping to maintain high ADR though the industry is not without its challenges. Ongoing staffing difficulties and the return t0 20 per cent VAT in the UK will be a pinch point for some, however with so much capital waiting to be deployed the market will likely remain buoyant.

At Recharge 2022, we heard from several hospitality investors and their sentiment is also positive. Lily Wecker from Zetland Capital shared how the group has expanded significantly over the last year or so, purchasing around 22 sites. The future outlook, whilst cautious about the geo-political circumstances, could see more hospitality-driven living concepts spurred by the blurring of live-work-play. It will take a level of expertise to successfully execute new concepts like this, and investment strategies could become increasingly analytical.

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