MANCHESTER, England — It is typical during different hotel industry cycles for performance and the outlook for transactions to be described as bearish or bullish.
But in the United Kingdom and Ireland, neither descriptor quite fits in the current environment, said Jacob Rasin, senior vice president, transactions at Stockholm-based Pandox.
“I would say, gray and dolphin-ish — up and down, up and down,” he said.
During a session at the Annual Hospitality Conference on hotel investment and transactions pace, Rasin said major hotel markets across the U.K. and Ireland appear healthy. Hotels in Edinburgh and Dublin are seeing occupancies exceed 80%, while hotel occupancy in Leeds is consistently greater than 70%, but he said the region would no doubt benefit from more food-and-beverage spend and U.S. travelers.
For now, the increase in corporate travelers, the presence of good liquidity and the number of hotels that might soon come to market are all giving investors cause for cheer.
Carine Bonnejean, managing director of hotels, at business advisory Christine & Co., said U.K. commercial real estate transactions for the first half of 2025 fell 73% year over year and of those hotels that traded, 79% were single assets as opposed to 18% in the same period the year before.
“In the first half of 2024, transaction volume in London equaled $1.65 billion,” she said, adding that in the first half of this year, London's transaction volume was $352 million, a decline of approximately 80%.
Despite a quieter period of hotel transactions, the first half of 2025 included two major deals in the U.K. and Ireland. Amsterdam-based Vastint has a sale in progress to unload its entire portfolio of Marriott International hotels with a total of 3,320 rooms, a deal it values at £500 million ($673 million). The other notable deal is an acquisition of Ireland’s Dalata Hotel Group by Pandox and partner Eiendomsspar for €1.4 billion.
Bonnejean said rumors continue to circulate over the sale of the sibling Malmaison and Hotel du Vin hotel portfolio. She added that while in the U.K. distress is not widespread, it is “something we should keep an eye on.”
A little less worry
Investors said that while conditions in the U.K. are not perfect, the state of the market and the return of corporate travelers are helping to settle nerves.
Peter Werhahn, managing director of real estate at Blackstone, said that hotel transaction discussions are a little easier to get through right now.
“There have been improvements on the spread side and on leverage. If you look at the next year, there are still assets that have to come to market, so there might be more competition,” he said.
Saurabh Chawla, vice president of transactions at Westmont Hospitality, said U.K. hotel owners and investors across the country are patiently waiting for further interest rate cuts.
“We think the U.K. is just coming off its peak, a good time to sell and get back in again,” Chawla said, adding that he is doing more selling than buying. “I am looking to buy one at the moment in regional U.K. [Westmont has] been surprised at the amount of liquidity out there.”
Between 2022 and 2024, Pandox was considering mostly single-asset hotel deals, Rasin said.
“In recent times, interest rates are easier to forecast, and it is easier to engage in transactions,” Pandox’s Rasin said.
J.J. Lenhart, managing director of The Baupost Group, agreed it is expected more hotels will come to market.
“Buyers are able to get liquidity, and those holding since COVID-19 are looking to exit,” he said.
Foreign exchange rates are playing a part with the value of the U.S. dollar down 8% against the British pound, Lenhart said.
“In the U.K., we also look at productivity, which has been flat. If that turns around, there will be opportunity,” he added.
At the end of 2024, Baupost and partner KKR & Co. acquired a 33-hotel U.K. portfolio for £900 million from Abu Dhabi Investment Authority. The portfolio includes the 311-room London Marriott Hotel Regent’s Park and 206-room London Marriott Hotel County Hall.
Bonnejean said in the U.K. right now is not a bad time to transact, but “it just takes time.”
Hotel investors must emphasize strong partnerships and best-in-class management and operations, Lenhart said. He added he sees strength in the U.K. hotel market over the near future.
“We put the U.K. into context with everything else we could have been doing, and we saw the market was strong medium-term. We have managed to franchise conversions and seek value that way. Over time, we will be looking to trim the long tail,” he added.
Blackstone’s June 2024 acquisition of the Village Hotels portfolio — also containing 33 assets — was a vote of confidence in the U.K., Werhahn said.
“Scale and complication we can do due to our experience and capital, although I think a lot of people do not even see us as a firm that can do single assets,” he said.
Werhahn added Village Hotels has many pluses: a good price point, an emphasis on wellness and the additional income from its membership structure.
“That wellness allows us to fine tune public spaces and [food and beverage]. Village is a very strong conversion brand, and there is much runway,” said.
Pandox's Dalata acquisition — which Scandic Hotels will operate — is a “once-in-a-decade opportunity, both operating assets and knowledge, and with a big allocation in London and Dublin, cities hard to get in,” Rasin said.
“Our intention is to separate the operating assets from the owned ones. In this deal, we have a strategic, familiar partner in markets we like, so a lot of boxes were ticked and stars aligned,” he said.