London has been named the top European city for hotel investment for the second year running, according to a Deloitte survey.
- Edinburgh continues to hold the title as the most attractive city for regional UK investment for a fourth consecutive year.
- There is an expected rise in hotel mergers and acquisitions activity in the coming year, with 70% of senior executives anticipating more deals.
- Despite optimism, leaders in the sector express concerns over rising costs and labour challenges.
- Paris, Madrid, Amsterdam, Rome, and Porto round out the top European cities for investment, reflecting diverse opportunities.
In a survey conducted by Deloitte, London has once more been honoured as the premier city for hotel investment across Europe. This recognition highlights the city’s enduring appeal among hospitality owners, lenders, developers, and investors. As a significant hub for international travel and business, London’s robust market continues to attract substantial investment interest, underscoring its stability and potential for growth.
Meanwhile, Edinburgh has been hailed as the top regional city within the UK for investment for the fourth year in a row. This ongoing appeal can be attributed to the city’s status as a favoured tourist destination and its consistent economic performance, which appeals to investors seeking viable opportunities outside of London.
The Deloitte survey, which polled 100 senior hospitality leaders, indicates a bullish outlook for merger and acquisition activity within the hotel sector. A notable 70% of respondents predict an increase in deals in the coming year, while over half of those surveyed plan to pursue more acquisitions, pointing to a dynamic shift in the industry.
However, the optimism is tempered by significant challenges. Rising costs have been flagged by 79% of respondents, alongside labour shortages identified by 71%, highlighting ongoing issues that could influence profitability and operational efficiency in the sector.
Furthermore, the spectre of high interest rates poses substantial risks to growth, and concerns about ‘overtourism’ are becoming increasingly pronounced, with 28% of industry leaders citing local resistance to tourist influxes as a potential risk.
Beyond the UK, Paris and Madrid have been identified as significant contenders for hotel investment, following London, with Amsterdam and Rome also maintaining strong positions. Notably, Porto has made a debut in the investment rankings, indicating its emerging prominence in Europe’s hospitality market.
Deloitte’s Leila Jiwnani commented on the findings, noting that London’s resilience and its role as a gateway city continue to make it an attractive proposition for investment. Jiwnani also observed the rising interest in luxury hotel markets driven by private equity, which has seen a 10% increase in interest over the past year.
London remains the foremost city for hotel investment in Europe amidst a landscape of growth and challenges.
