Hospitality industry statistics indicate that there are currently more than 55,000 hotels and guest houses in the UK, employing around 1.5 million people. The UK hotel market can be divided into four main categories:
1. Big City Hotels: Usually the most expensive to purchase, particularly in London. The range of facilities offered can vary considerably, depending on the target clientele, but because these hotels offer the chance of good occupancy rates, all year round, potential profits are high.
2. Town Hotels: Not usually recommended for first time hotel buyers; owners can often find it difficult to define a suitable (and profitable) niche in the market for their establishment, although a high quality restaurant can be a sure-fire winner.
3. Resort Hotels: Buyers should not underestimate the effect of seasonal and climatic fluctuations when considering the purchase of a seaside or other resort-style hotel. Nevertheless, small resort hotels are popular with first time hotel buyers because purchase prices are often relatively low (compared to the general property market) and this type of hotel can be run successfully by a small number of staff.
4. Country Hotels: In recent years, many country hotels have opened and have become highly successful ventures. However, the financial success of this type of hotel often depends more on its restaurant and banqueting facilities than on the accommodation provided. In quiet rural areas, hiring (and retaining) suitably qualified staff can be a major issue, in spite of the recent influx of hotel staff from Eastern Europe looking for employment.
Types of Hotel Mortgages
Specialist brokers are able to arrange commercial hotel mortgages for a variety of purposes on behalf of both new and current hotel proprietors. They can be used for:
- Initial purchase of a hotel
- Current tenant purchasing hotel freehold
- Buying out a partner’s share in a hotel
- Refurbishment of bedrooms, restaurants and public areas
- Adding extra bedrooms
- Adding extra facilities, e.g. fitness centre, conference rooms
- Consolidation of existing loans at a lower rate of interest
- Commercial mortgages are available for both the purchase and refurbishment of hotels
- The UK hotel market can be divided into four major categories: large city hotels, town hotels, resort hotels and country hotels