The United Kingdom’s hotel sector will show a noticeable surge in transactions outside of London as hotel-ownership balance sheets are cleaned up following the tumultuous year that was 2020, according to sources.

Speaking at the 16th New Year Hotel Investment Summit organized as a webinar by hotel consultancy Whitebridge Hospitality, director Philip Camble said 2020 was the first year in history in which oil prices were negative.

He added that, according to his firm’s numbers, revenue per available room in London fell 77.2%.

The Whitebridge investment summit kicks off every year with Camble’s prediction, some of which are directly related to the hotel sector while others of a more whimsical nature, such as who might win the English Premiership soccer tournament.

Camble predicted that winner, Liverpool, but not the RevPAR numbers, which he said would be +3% for the full year.

Nick Pattie, managing director, Whitebridge, said probably no one could have predicted the correct number.

“At this time last year, no one mentioned COVID-19. It was a local problem in another market,” he said.

Move forward 12 months, and Pattie said the U.K. now sees huge variations between segments of market demand.

“London is reliant on international and corporate demand, which has left it exposed, and there is little chance of it capturing leisure demand, as the theaters and such are closed,” he said.

The current year, if the current rollout of vaccinations continues, will see numbers improve, obviously from extremely low bases, Camble said.

“There will be lots of 2020 events in 2021—Tokyo Summer Olympics 2020, (soccer’s) European Championships 2020, Ryder Cup 2020 and Dubai Expo 2020,” he said.

He said he expected London’s RevPAR to grow to more than £75 ($102) as pent-up demand is unleashed.

He mentioned the U.K. government’s claim that all its adults will be immunized by September and low-fare airline Ryanair having ordered 75 Boeing Mix-8200 aircraft as two signs as to why hoteliers will be smiling more this December than they were last December.

RevPAR will decline in some regions.

Camble said the English county of Devon is likely to be one of these markets.

Hotels in regional markets had a stellar summer 2020 as Brits were allowed to travel within the U.K. because of travel restrictions elsewhere. These travelers almost exclusively chose rural and seaside locations.

By the end of the year there would likely be a rush for Brits to travel abroad, but perhaps on fewer airlines, he said.

His boldest prediction is that United Arab Emirates’ airlines Etihad and Emirates will merge.

Camble and Pattie said that in 2020 hotel-firm buys shrunk as everyone focused on saving cash.

The largest single-asset transaction of the year in Europe was the sale of the 136-room Ritz London for £800 million by David Barclay, who died 10 January, and Frederick Barclay to an unnamed Qatari buyer.

Another large deal in 2020 also occurred before the outbreak of COVID-19, the €573-million deal for the eight-asset, former Dedica Anthology, which includes the Prague Carlo IV, now managed by NH Hotels & Resorts. (NH Collection)

The deal happened in March, when the seriousness of the pandemic was perhaps not fully realized.

Camble said that deal was for £5.89 million per key, “which might be a world record.”

The largest lodgings transaction in the continent that year, Camble added, was the £893 million sale in June of The Netherlands’ Roompot Group, which specializes in vacation parks, by U.S. investment firm KKR.

The other notable transaction also occurred before the pandemic took hold globally, with French real estate investment trust Covivio buying the Dedica Anthology portfolio of eight hotels from Italian investment firm Värde Partners for €573 million.

That deal comprised 1,115 rooms.

Camble said that in a normal year, there are an average of 20 hotel deals in London, but in 2020 London saw only five.

In Regional U.K. there usually are 100 deals per annum, he said, and in 2020 that number was down to 60, with the highest price tag only £24 millio.

“In 2020, we saw only a few distressed deals, but this will surely rise in 2021. The question is: In what markets? [In Europe] the U.K. and Ireland offer the most, as they tend to be quickest sorting out such opportunities,” Camble said.