UK: Colliers International has seen a 200 per cent uplift in formal viewings in July compared to the previous month, namely from investors, developers and lifestylers interested in staycation hotspots.
Julian Troup, head of UK hotels agency at Colliers, said that the changes in tourism as a result of the pandemic is bringing new opportunities to the UK hotel industry in the form of prospective buyers.
While investors are being attracted by the fundamentals of the staycation market, developers are interested in the opportunities offered by well-located hotels that have the potential to be repurposed for residential use. Lifestylers are seeking a change of scenery.
Troup explained: “An increasing flow of opportunistic investment buyers have been contacting us, presumably attracted by anticipated pricing adjustments taking place among hotels with a greater reliance upon corporate and events trade. There are still numerous well-heeled cash buyers out there, as well as plenty of overseas buyers and investors in waiting. We have also been receiving a noticeable increase in alternative use enquiries from developers and other types of operator. If planning rules are relaxed, we expect to see certain hotels also attracting interest for alternative use.
“There has always been a steady stream of lifestyle purchasers. However, all the signs are that more people will decide they want to consider a complete lifestyle change, cannot face returning to work, and want to have an opportunity to control their own destinies. With many wishing to leave living and working in cities, buying a hospitality business in a location of their choice is a real alternative, particularly where the move is enforced in the event of redundancy or having to downsize. In the last recession we saw many examples of new to the industry buyers who took advantage of being able to invest redundancy monies as well as releasing equity from their house sale.”
He added that the resilience of the market is demonstrated by the fact that during lockdown, Colliers completed a number of sales, notably Boscundle Manor in Cornwall; The Radnorshire Arms hotel in Presteigne, Powys; The Angel & Royal, in Grantham; the historic 15 bedroom The George Hotel in Easingwold, North Yorkshire, and traditional coaching inn, The Bull Hotel in Burford, Oxfordshire.
“National Parks and areas of outstanding natural beauty, plus destinations offering leisure attractions will all prosper,” Troup continued. “This is already evidenced with clients experiencing a strong spike in domestic leisure hotel trade.
“All the signs are that this trend is set to continue, and that hotels in locations which benefit from ‘staycation’ holidays will attract a healthy level of interest in the months to come. These hotels offer buyers a great place to live, work and make profit. They should attract more funding support and, based on the impressive trading figures and forecasts we have seen, in most cases will provide buyers with a solid return on investment.
“UK hotels have been proactive in responding to public anxiety about COVID-19 by providing demonstrably safe, clean accommodation featuring heightened cleaning protocols and standards. Those businesses with extra space will benefit as they will be better able to provide social distancing and greater comfort, but all hotels are reconfiguring to ensure that social distancing can be maintained. Hotels will adapt their offering to the changing times in which we are living, and business will return. With all this in mind, we anticipate movement in the transactional marketplace will start again as early as Q3 of 2020.”