Christie & Co has released its annual Business Outlook report, ‘Business Outlook 2024’, which reflects on key market activity, trends, and challenges in 2023, including the hotel sector.
The report indicates a rebalancing in the UK hotel sector in 2023, with transaction volumes progressively improving from the summer onwards, leading to a stronger second half of the year.
The bid-ask spread between sellers seeking value for strong trading performance and buyers having to factor increased debt costs into their pricing is narrowing, resulted in a -4.1% drop in Christie & Co’s hotel price index for 2023.
The report also highlights several challenges in the hotel industry, including increased distress through consensual and forced sales, polarisation of the market towards economy and luxury segments, softening yields due to a stabilising yet high interest rate environment, and development pipeline risks in key markets due to increased debt and construction costs. It also highlights the need for further brand consolidation.
Carine Bonnejean, Managing Director of Hotels at Christie & Co said that they had seen “a notable increase in deals agreed during the second half of the year as well as an uprise in distressed cases which will boost investment volumes during the course of 2024. Activity has already picked up during the first few days of this year, with a call to action from owners and lenders in particular.”
Click here to read the full report: https://www.christie.com/news-resources/business-outlook/2024/