9 Weeks In

What have we learnt from the first 9 weeks of 2024, what is the #Hotel property market doing, and what can we expect for the rest of this year? Richard Payne takes a look. Predicted downward pressure on room rates in 2024 will limit the ability of hotels in the regions to continue to absorb these costs through price increases to guests, this is due to a mix of oversupply in rooms versus changes in customer demand and slower corporate business bookings and will focus business minds more on improving operational efficiency. Dynamic pricing will always play a disguised factor in being able to pass on some of the costs, but not all, and only in 'the main season' and or during local events.

With an average occupancy rate of 71% overall across 2023, ADR came in 4.3% up and RevPar 4.9% up on 2022, so things seem to be heading in a good direction despite the difficulties of the CRE sector, interest rates, and geopolitical interference. Things look set to continue on a similar trajectory in 2024, with many operators choosing Tech as their No1 priority to deliver growth including contactless service, and AI integration. RevPar growth forecasts look to be pushing 4%, with 3.25% as an increase in ADR.

London looks set remain the busiest market for acquisitions and investment this year with the city wishing to retain its top spot for overseas investors. Quirk and difference seem to be the order of the day from a property perspective with US Hotel Grp 'MCR' paying £275 million for The BT Tower for conversion to a hotel & #hospitality venue. The existing restaurant dates back to the late 60's opened by Billy Butlin.

Cities like #Manchester, #Leeds, #Bournemouth, #Exeter, and #Bristol all saw huge growth in room numbers, with plenty of new openings from the like of Travelodge and Premier Inn who now seem to dominate the Manchester skyline from all corners. Many operators will need to be careful that 'going green' doesn't impact on their service levels in an attempt to satisfy shareholders in a way that the luxury market does not need to, especially against the backdrop of huge growth we have seen in the luxury sector.

The regions will continue to play a big part in transaction activity, most notably The South West and Midlands, where we transacted our most recent business sales completion in a beautiful Golf & Country Club sale. Personal Broking is becoming a much more bespoke way for sellers to have a trusted partner in their corner from a sales perspective, and our clients love the benefit of being only 1 of a handful of deals happening at any one time, rather than them having to be part of a large volume portfolio. This allows us to be totally hands on, bespoke, almost unique to them, and as individual as each transaction is.