The hotel industry in the UK is attracting greater investment than in any other western European country, according to a new report.
During the first half of 2012, hotel investment volume in France, Germany, Italy, Spain and the United Kingdom suffered a 37 per cent drop compared to the same period a year ago, says the latest research by BNP Paribas Real Estate.
However, the UK performed much better than its rivals, dominating the hotel investment market at 53 per cent of overall investment amongst the top five markets.
In total, the country saw €2.8 billion (£2.28 billion) of investment in the hotel sector on a rolling basis at the end of the first half of the year.
According to the report, investment is largely being driven by overseas equity rich investors who continue to focus on prime assets regardless of their high cost per key and low yields.
The news is likely to be one reason why hotel recruitment levels in the UK have remained relatively strong despite the tough economy.
Furthermore, in comparison to most other major European markets, UK hotels enjoy high occupancy and revenue rates – both of which increased in the first half of the year.
"Growth in the United Kingdom does not look significant but the levels of occupancy rates (+0.8pt) and revenue per available room (+0.9) are already high," said the report.
"Indeed, with an occupancy rate reaching 73.3 per cent in H1 2012, the UK can brag about recording the highest occupancy rate in Europe, so can London at 85.6 per cent."
Meanwhile, despite the fall in hotel investment across western Europe during the first half of the year, the report states that by the end of June 2012, activity in the hotel sectors in the major northern European countries – UK, France and Germany – "remained strong given the current economic context".
In comparison, the markets in Italy and Spain have been heavily affected by the consequences of the sovereign debt crisis.
Berkeley Scott is a leading London hotel recruitment agency