Amsterdam has been voted the most attractive European city for hotel investment in Europe for the third year in a row, according to the latest survey of senior hospitality industry figures by Deloitte.
London climbed to second place from fourth in 2017 after gaining 24% of votes, behind the 34% backing Amsterdam, but ahead of Paris (22%), Madrid (19%), Dublin (18%) and Barcelona (16%).
UK at ‘peak in investment cycle’
The rise for London comes despite 70% of respondents saying that the UK is at a “peak” or “downturn” in its investment cycle. By contrast, investors identified France (50%), Greece (48%) and Spain (46%) as the European markets that are on an “upturn”.
Andreas Scriven, head of hospitality and leisure at Deloitte, said: “It is reassuring to see London climb back up the rankings, and somewhat curious considering the uncertainty around the manner in which the UK will exit the EU in less than five months’ time.
“For London to continue to remain attractive to hotel investors, it will need to address concerns around oversupply and high pricing. Investors will be keeping a close eye on currency markets in the coming months, as sterling’s weakness is likely to be a key driver of inbound investment into the UK capital.”
Regional markets
Regionally, Edinburgh was named as the most attractive UK city for hotel investments in the next 12 months, according to 39% of respondents.
Cambridge was in second place (30%), overtaking Manchester (28%). All three cities are also expected to see the highest growth in RevPAR (revenue per available room) in 2019.
The majority of hotel investors are optimistic about 2019 growth prospects in the regional UK hotel market, with 52% of respondents expecting RevPAR growth to be between 1-3% across the UK, although this is down from 70% last year.
Less confident on GOPPAR
But hotel investors were less confident when asked about expectations for gross operating profit per available room (GOPPAR) in 2019. One in four respondents (25%) expect GOPPAR to enter negative territory in London over the next 12 months, while 21% expect negative GOPPAR regionally in the UK.
The findings are based on responses from 122 hospitality leaders from across the world.
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