UK hotel investment volumes exceeded £1.1 billion in the first quarter of 2026, up 63 per cent on the £680 million recorded the same quarter in 2025, according to data from Savills.
London accounted for 68 per cent of total volumes, with activity led by the transaction of major “big box” assets including Park Plaza Waterloo, Marriott Grosvenor Square, Radisson Blu Leicester Square and the Grafton Street development in Mayfair.
Savills notes that capital continues to flow into the sector, with liquidity improving across both equity and debt markets and pricing expectations becoming more closely aligned. A borrower‑friendly and competitive debt environment provides a solid foundation for further growth in transaction volumes in 2026. However, in the near term, risks and volatility remain, with geopolitical uncertainty slowing RevPAR growth and increased minimum wage costs still taking effect.
Why it matters
The concentration of activity in London reinforces a clear hierarchy in investor preference in an uncertain macro environment, with prime London hotels continuing to function as a safe haven for both domestic and international investors. Nonetheless, factors including cost pressures and geopolitical uncertainty remain ones to watch.
What they said
Thomas Emanuel, head of hospitality thought leadership EMEA at Savills says: “The sharp uplift in Q1 investment volumes reflects strengthening investor confidence and the continued resilience of the UK hotel market. London remains a standout performer, particularly in the large scale and luxury segments and we expect further transactional activity as new high‑quality stock comes to market, including launches such as Bertrand’s Townhouse in Bloomsbury. With liquidity improving and new opportunities emerging, the outlook for 2026 remains encouraging.”