Hotel Investment Opportunities
Global traveller numbers hit over 1 billion on a yearly basis meaning a sixth of the world's population are potentially looking for hotel accommodation. With this in mind investing in hotels has been a wise move by savvy investors for some time already.
It is often the case that if you try to book a hotel room within days of travelling you may well have difficulty booking a room as hotels are often fully booked, especially in popular tourist and business areas of the UK.
In addition to high demand, hotels are often not cheap to book and demand far higher rates than any other kind of accommodation, indeed hotel rooms can cost hundreds or even thousands of pounds a week.
These high rates are one of the main reasons why hotel investments can offer investors such high yielding returns of 10% and above, assured for 5-years, often with a built-in exit strategy.
Unlike most other property investments the price of a unit and the annual yield scale up much better, the reason for this is often due to the fact that higher-end hotels cater to much higher standards, therefore, can easily charge much more for rooms, whereas cheaper hotels can squeeze in many rooms and keep them fully occupied, this easily keeps rental yields close to double figures on these investments.
Discover more about the advantages, competition and risks of hotel room investment in our in-depth guide on Buying and Investing in Hotel Rooms.
Best Location For Hotel Investment Opportunities
Hotel location is obviously one of the key factors for travellers, holidaymakers and business people. We have found that, in the UK, areas which enjoy consistently high demand and good occupancy rates all year round are generally tourist areas.
When this finding is combined with the fact that investment prices in these locations are easily affordable for the average investor it becomes clear why hotel room investments have been the highest growth sector within the property investment industry for a number of years now.
As for more urban locations such as London, the high purchase prices and the expense of booking a room combine to create a less profitable investment opportunity for our investors, therefore we do not tend to offer investments in major cities, but focus on tourist areas where demand is constant and purchase prices affordable.
With major chains such as Premier Inn and Travel-lodge overbooked in these high-demand tourist areas it falls on independent hotels to fill the large demand and it is these hotels that are ripe for savvy investors to profit from.
With such a reliable stream of customers, hotel investments are among the most secure and profitable available to investors in the present day.
When evaluating a hotel investment opportunity investors need to look at the hotel's reviews online, what attractions are close by and of course, rental yield and exit strategy.
Request a callback from one of our property investment experts and ask us anything, or to share your feedback.
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