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The UK hotel transaction market is currently undergoing a sophisticated rebalancing act. To the casual observer, the shift from a record-breaking £6.6bn in 2024 to approximately £4.3bn in 2025 looks like a cooling of interest. However, industry experts argue that the 2025 slowdown is less about a lack of interest and more about a change in appetite. The market is recalibrating, moving from the blockbuster portfolio era of 2024, which saw giants like Village Hotels and the Edwardian collection change hands, to a new era defined by single-asset precision and domestic grit.
The primary reason for the numerical dip between 2024 and 2025 lies in the sheer scale of the deals that preceded the current cycle. Carine Bonnejean, managing director, Hotels and International at Christie and Co, explains that the 2024 peak is largely due to massive portfolio transactions that “topped up” the market. “You had a really good base of single assets (in 2024), but you also have these very big volume transactions that really topped up quite significantly in the market,” Bonnejean says. The biggest deal in 2024 was the sale of the Six Senses London, which is still under development. That deal amounted to £180m, at £1.7m per key. She adds: “In 2025 overall, it was still a very decent market. From a personal perspective, we sold slightly more single-asset hotels than we had sold the previous year. So that side of the market was strong, but we were slightly missing this top-up with big portfolios that were really pushing the numbers.”
Cristina Balekjian, director of UK Hospitality Analytics at CoStar Group, agrees that the “slowdown” is a matter of deal composition rather than a lack of liquidity. She explains that the UK remains an attractive and liquid market that investors understand well. “2024 was very much a portfolio-driven environment,” Balekjian notes. “The big portfolio sales drove a lot of the activity, whereas in the year 2025, we did shift quite a bit to being more single-asset driven in terms of what was driving deal activity. I guess it’s a little bit more encouraging to think that perhaps there is more alignment between buyers and sellers in terms of the pricing that’s being achieved.”
A significant undercurrent in the 2025 figures is the cooling of the post-Covid revenge travel era. Bonnejean suggests that the boom isn’t necessarily over but has “stabilised” into a more normalised market. She observes a growing dichotomy in the market; while the luxury and ultra-high-net-worth segments continue to thrive, the mid-scale and economy sectors are feeling the pinch.Bonnejean says: “Consumers have to be realistic in light of what inflation we are seeing. With cost increases in a lot of our day-to-day life, and the uncertainty around economy, geopolitics, and budgets, everybody starts to be a bit more conscious and a bit more clever. There is a shift where people are a bit more conscious, but we’re also seeing a lot more improvement in the luxury space.” This shift in consumer behavior directly impacts investor sentiment. Balekjian notes that this trend has certainly affected trading performance. She explains that while the UK competes with high-growth markets like Spain and Italy, the UK’s Average Daily Rate (ADR) has remained relatively stable. “The UK also competes with markets like Spain and Italy and Portugal and Greece,” Balekjian explains. “Spain and Italy have really attracted a lot of investment over the past couple of years, whereas Northern Europe has struggled a little bit more in terms of trading. That may be also why there’s a bit of a shift towards those markets.”
The retreat of international investors, particularly North American private equity, was a defining feature of 2025. Bonnejean attributes this shift primarily to the type of stock available. She explains that the type of buyers in the market depends heavily on what is actually for sale, though she admits government policy creates friction. She notes that recent budget decisions and operational headwinds, such as rising staff costs, are not helping the situation. “None of that can really help, let’s be honest,” she says. Balekijan also states: “There is now a much more selective process and a higher level of due diligence. Deals are progressing a little bit more slowly than they used to in the past. This creates a statistical slowdown because deals that might have closed in 2025 are being pushed into 2026.” She adds that due diligence now involves a deep dive into payroll and tax exposure. With the 6.7% Minimum Wage hike and increased National Insurance contributions from the Autumn Budget, international investors are hiring specialist consultants to model exactly how much profit will be eaten by these new costs. In 2024, investors focused on rising room rates (ADR). “However, investors no longer trust that they can simply raise room rates to cover rising costs. They need to see a lean operational plan, often involving AI or automation, before they sign off,” she notes.
Balekjian also sees big US investment firms stepping back. She explains that these ‘giant’ investors usually only want to buy when they can find huge groups of hotels to add to their collection. Since they already bought several massive hotel chains in 2024, they are now pausing because there aren’t many large ‘bundles’ left to buy that would actually make a difference to their business. However, she believes the market remains “opportunity-led,” arguing that when a high-quality asset comes available, especially in London, the buyers will always appear regardless of the economic noise.
As global funds became more cautious, UK domestic investors, regional groups and private owners, stepped into the vacuum. Both Balekijan and Bonnejean are of the opinion that these players have a distinct advantage as they understand the “ground game” of UK operations. “They have more understanding of what’s happening on the day-to-day,” Bonnejean says of domestic buyers. “They’re already highly exposed to the market. For them, it is easier to absorb maybe, and to have a plan to actually counteract some of those forces. Having to absorb one hotel is much easier than having to absorb a portfolio.”
Balekjian notes that regionally, domestic capital is thriving. She explains that because trading performance is not growing as fast as inflation, owners must be expert at implementing efficiencies. “It will very much depend on the management of each property and management of platforms, of how they go about managing that profit margin pressure,” Balekjian says. “There’s a lot of people talking about implementing technology to find ways to cut costs and be able to make the operational side of things more efficient.” Travelodge for instance has recently acquired an 11-hotel portfolio (including former Campanile sites) to grow their freehold estate. Meanwhile, Balekijan points out that Fattal Hotel Group (Leonardo Hotels) have been busy buying into their own properties, acquiring the freeholds of hotels they previously only leased in locations like Southampton, Exeter, and Chester to gain more control. Additionally, both experts point to the Pandox acquisition of the Dalata Hotel Group (which includes the Maldron and Clayton brands) as the exception to the rule,a major portfolio deal that successfully crossed the finish line in late 2025 despite the general slowdown.
Investor interest in 2025 and early 2026 is gravitating toward specific types of hotels rather than generic brands. Lifestyle and boutique hotels remain the “darlings” of the investment world, Bonnejean notes. She adds: “But today’s investors are looking for more than just a stylish building, they want a ‘value-add’ opportunity. They are asking: ‘How can we truly transform this property to increase its worth?’ A key part of that strategy is finding ways to protect profits from rising costs.” As a result, investors are now targeting hotels where they can use automation or AI to handle routine tasks, which helps lower the financial burden of a large payroll. Balekjian confirms this preference, noting that lifestyle hotels are favoured because their operations tend to be leaner. “Investors will look to buy properties where they see that they can add value at the end,” Balekjian explains. “A Hoxton generally is very attractive because it has all the right elements that investors tend to like. And then budget hotels because travellers will always choose to go to an economy hotel; there’s always going to be demand for those types of assets.”
The strong start to January 2026 suggests that the pricing standoff between buyers and sellers is finally thawing. “We expect to see a healthy supply of hotels hitting the market this year,” Bonnejean predicts. “As long as sellers price their properties realistically based on the current economy, the demand will be there. Buyers haven’t lost interest; they are just waiting for the right price.” Balekjian views the current market momentum as a period of “cautious optimism.” She notes that the standoff between buyers and sellers is starting to align, creating a prime environment for strategic acquisitions. She says: “Hopefully the price gap will narrow even further. As people reassess what their portfolios look like, that alignment will create more deal activity. We’re already seeing this in early 2026 with several major opportunities driving the conversation.”
Balekjian identifies three standout portfolios that are currently testing the market’s appetite:
As the industry looks ahead, the consensus is that the market has successfully weathered the shock of rising operational costs and is ready for a more stable 2026. The shift from international mega-deals to domestic single-asset growth has created a more granular, resilient market. As Bonnejean concludes: “I think we are confident this year again that we’re going to see a good level of activity generally. I don’t think there is anything to worry about. The environment is what it is. When there is some uncertainty, you also create some opportunities. We should have another good year for hotels.”
The UK hotel transaction market is currently undergoing a sophisticated rebalancing act. To the casual observer, the shift from a record-breaking £6.6bn in 2024 to approximately £4.3bn in 2025 looks like a cooling of interest. However, industry experts argue that the 2025 slowdown is less about a lack of interest and more about a change in appetite. The market is recalibrating, moving from the blockbuster portfolio era of 2024, which saw giants like Village Hotels and the Edwardian collection change hands, to a new era defined by single-asset precision and domestic grit.
The primary reason for the numerical dip between 2024 and 2025 lies in the sheer scale of the deals that preceded the current cycle. Carine Bonnejean, managing director, Hotels and International at Christie and Co, explains that the 2024 peak is largely due to massive portfolio transactions that “topped up” the market. “You had a really good base of single assets (in 2024), but you also have these very big volume transactions that really topped up quite significantly in the market,” Bonnejean says. The biggest deal in 2024 was the sale of the Six Senses London, which is still under development. That deal amounted to £180m, at £1.7m per key. She adds: “In 2025 overall, it was still a very decent market. From a personal perspective, we sold slightly more single-asset hotels than we had sold the previous year. So that side of the market was strong, but we were slightly missing this top-up with big portfolios that were really pushing the numbers.”
Cristina Balekjian, director of UK Hospitality Analytics at CoStar Group, agrees that the “slowdown” is a matter of deal composition rather than a lack of liquidity. She explains that the UK remains an attractive and liquid market that investors understand well. “2024 was very much a portfolio-driven environment,” Balekjian notes. “The big portfolio sales drove a lot of the activity, whereas in the year 2025, we did shift quite a bit to being more single-asset driven in terms of what was driving deal activity. I guess it’s a little bit more encouraging to think that perhaps there is more alignment between buyers and sellers in terms of the pricing that’s being achieved.”
A significant undercurrent in the 2025 figures is the cooling of the post-Covid revenge travel era. Bonnejean suggests that the boom isn’t necessarily over but has “stabilised” into a more normalised market. She observes a growing dichotomy in the market; while the luxury and ultra-high-net-worth segments continue to thrive, the mid-scale and economy sectors are feeling the pinch.Bonnejean says: “Consumers have to be realistic in light of what inflation we are seeing. With cost increases in a lot of our day-to-day life, and the uncertainty around economy, geopolitics, and budgets, everybody starts to be a bit more conscious and a bit more clever. There is a shift where people are a bit more conscious, but we’re also seeing a lot more improvement in the luxury space.” This shift in consumer behavior directly impacts investor sentiment. Balekjian notes that this trend has certainly affected trading performance. She explains that while the UK competes with high-growth markets like Spain and Italy, the UK’s Average Daily Rate (ADR) has remained relatively stable. “The UK also competes with markets like Spain and Italy and Portugal and Greece,” Balekjian explains. “Spain and Italy have really attracted a lot of investment over the past couple of years, whereas Northern Europe has struggled a little bit more in terms of trading. That may be also why there’s a bit of a shift towards those markets.”
The retreat of international investors, particularly North American private equity, was a defining feature of 2025. Bonnejean attributes this shift primarily to the type of stock available. She explains that the type of buyers in the market depends heavily on what is actually for sale, though she admits government policy creates friction. She notes that recent budget decisions and operational headwinds, such as rising staff costs, are not helping the situation. “None of that can really help, let’s be honest,” she says. Balekijan also states: “There is now a much more selective process and a higher level of due diligence. Deals are progressing a little bit more slowly than they used to in the past. This creates a statistical slowdown because deals that might have closed in 2025 are being pushed into 2026.” She adds that due diligence now involves a deep dive into payroll and tax exposure. With the 6.7% Minimum Wage hike and increased National Insurance contributions from the Autumn Budget, international investors are hiring specialist consultants to model exactly how much profit will be eaten by these new costs. In 2024, investors focused on rising room rates (ADR). “However, investors no longer trust that they can simply raise room rates to cover rising costs. They need to see a lean operational plan, often involving AI or automation, before they sign off,” she notes.
Balekjian also sees big US investment firms stepping back. She explains that these ‘giant’ investors usually only want to buy when they can find huge groups of hotels to add to their collection. Since they already bought several massive hotel chains in 2024, they are now pausing because there aren’t many large ‘bundles’ left to buy that would actually make a difference to their business. However, she believes the market remains “opportunity-led,” arguing that when a high-quality asset comes available, especially in London, the buyers will always appear regardless of the economic noise.
As global funds became more cautious, UK domestic investors, regional groups and private owners, stepped into the vacuum. Both Balekijan and Bonnejean are of the opinion that these players have a distinct advantage as they understand the “ground game” of UK operations. “They have more understanding of what’s happening on the day-to-day,” Bonnejean says of domestic buyers. “They’re already highly exposed to the market. For them, it is easier to absorb maybe, and to have a plan to actually counteract some of those forces. Having to absorb one hotel is much easier than having to absorb a portfolio.”
Balekjian notes that regionally, domestic capital is thriving. She explains that because trading performance is not growing as fast as inflation, owners must be expert at implementing efficiencies. “It will very much depend on the management of each property and management of platforms, of how they go about managing that profit margin pressure,” Balekjian says. “There’s a lot of people talking about implementing technology to find ways to cut costs and be able to make the operational side of things more efficient.” Travelodge for instance has recently acquired an 11-hotel portfolio (including former Campanile sites) to grow their freehold estate. Meanwhile, Balekijan points out that Fattal Hotel Group (Leonardo Hotels) have been busy buying into their own properties, acquiring the freeholds of hotels they previously only leased in locations like Southampton, Exeter, and Chester to gain more control. Additionally, both experts point to the Pandox acquisition of the Dalata Hotel Group (which includes the Maldron and Clayton brands) as the exception to the rule,a major portfolio deal that successfully crossed the finish line in late 2025 despite the general slowdown.
Investor interest in 2025 and early 2026 is gravitating toward specific types of hotels rather than generic brands. Lifestyle and boutique hotels remain the “darlings” of the investment world, Bonnejean notes. She adds: “But today’s investors are looking for more than just a stylish building, they want a ‘value-add’ opportunity. They are asking: ‘How can we truly transform this property to increase its worth?’ A key part of that strategy is finding ways to protect profits from rising costs.” As a result, investors are now targeting hotels where they can use automation or AI to handle routine tasks, which helps lower the financial burden of a large payroll. Balekjian confirms this preference, noting that lifestyle hotels are favoured because their operations tend to be leaner. “Investors will look to buy properties where they see that they can add value at the end,” Balekjian explains. “A Hoxton generally is very attractive because it has all the right elements that investors tend to like. And then budget hotels because travellers will always choose to go to an economy hotel; there’s always going to be demand for those types of assets.”
The strong start to January 2026 suggests that the pricing standoff between buyers and sellers is finally thawing. “We expect to see a healthy supply of hotels hitting the market this year,” Bonnejean predicts. “As long as sellers price their properties realistically based on the current economy, the demand will be there. Buyers haven’t lost interest; they are just waiting for the right price.” Balekjian views the current market momentum as a period of “cautious optimism.” She notes that the standoff between buyers and sellers is starting to align, creating a prime environment for strategic acquisitions. She says: “Hopefully the price gap will narrow even further. As people reassess what their portfolios look like, that alignment will create more deal activity. We’re already seeing this in early 2026 with several major opportunities driving the conversation.”
Balekjian identifies three standout portfolios that are currently testing the market’s appetite:
As the industry looks ahead, the consensus is that the market has successfully weathered the shock of rising operational costs and is ready for a more stable 2026. The shift from international mega-deals to domestic single-asset growth has created a more granular, resilient market. As Bonnejean concludes: “I think we are confident this year again that we’re going to see a good level of activity generally. I don’t think there is anything to worry about. The environment is what it is. When there is some uncertainty, you also create some opportunities. We should have another good year for hotels.”
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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