The UK remains the most liquid European hotel market, accounting for a 34.6% share of transaction volumes, according to Savills.
Transaction volumes in the country totalled €746.5 million in the first quarter, putting it ahead of Spain (€400 million) and Germany (€241.1 million).
Overall, European hotel investment figures reached €2.16 billion in the first quarter.
“2021 will mark the early beginnings of recovery for many hotels, with the longer-term outlook remaining promising,” Josh Arnold, associate, Savills Research said.
“The vaccine rollout in Europe suggests any current lockdowns will be the last, and that demand pick up is imminent. As countries begin easing restrictions, we can expect the staycation market to benefit in the first instance, followed by recovery across short-haul international leisure destinations.”
For months now many investors have been talking about the mismatch between sellers and buyers in the market, which is restricting sales. Owners have been able to use government loans to keep things ticking over even with hotels being closed for significant amounts of time.
“The emphasis on prime assets is evidenced across key Q1 2021 deals. For example, the Zetter Group, comprising three prime London assets, was acquired by Orca Holdings in March, with the brand looking to expand further into key European gateway markets such as Paris, Madrid and Amsterdam,” Richard Dawes, director at Savills Hotel Capital Markets, said.
In the second quarter there have already been a number of deals announced in key markets, indicating that the market is starting to free up.
The Royal Clifton hotel in Southport was bought by Britannia and the Hilton Bracknell sold for £17.5 million.