Deloitte
Business management & development Business management & development
Trend watch 2024 I
Andreas Scriven, head of hospitality and leisure at Deloitte UK, explains why confi dence in the hotel industry is high with investment and M&A on the agenda for 2024.
n a market environment where businesses are increasingly facing pressure on resources and margins, we asked hospitality leaders in Europe
and the UK about their expectations and predictions for the future. This year’s European Hotel Industry Survey by Deloitte asked senior hospitality leaders, owners, lenders, developers and investors about the key trends that will shape the hospitality industry in 2024. The proportion of respondents believing profitability will improve in the next five years has nearly doubled, rising from 38% in 2022 to 64% in 2023. In addition, nearly three-quarters of respondents (73%) said they are optimistic about the long-term future of the UK hotel market, up from 66% last year. In a sign that deal activity could be accelerating in the hospitality sector, divestitures (24%) and acquisitions (58%) have both increased as key priorities for business leaders in the year ahead, rising by 18 percentage points and 16 percentage points, respectively year-on-year. It’s clear that demand for quality hotel assets in the UK remains strong, with a range of capital looking to enter or expand in the market. However, in many cases there remains a bid- ask gap that has derailed a number of transactions in recent months. While many potential buyers are still anticipating distressed transactional activity, vendors
Hotel Management International /
www.hmi-online.com
point to very strong operational performances to mitigate against the risk of distress and any associated price chipping.
London calling
London was rated the most attractive European city for hotel investment for the year ahead in the survey. The UK capital has risen two places since last year, with Lisbon retaining second place and Amsterdam falling to third. It is the first time since 2017 that Amsterdam has not been top spot. Hotels (39%) are rated the most attractive asset class to invest in 2024, rising by 15 percentage points from last year. This was followed by student housing (27%) and serviced apartments (16%). The majority of respondents expect to see London’s revenue per available room (RevPAR) to grow in 2024. More than half (54%) expect the capital’s RevPAR to grow between 4% to 7% (up from 41% last year), while 72% of respondents anticipate a RevPar of between 1% to 5% in the UK regions this year (up from 53% in 2022). Hotel executives also showed improved optimism in
their expectations for London’s gross operating profit per available room (GOPPAR) in 2024 compared with the past two years. The majority of respondents (58%) expect London’s GOPPAR growth to be 1% to 5%, up
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