Hotel transaction volumes in the UK market totalled GBP5 billion for the full year of 2025, according to a deal tally completed by agent Savills.
While the total was down 15% on the 2024 figure, the final number is closely aligned with the long term average of GBP4.7 billion for the last decade, indicating the previous year was a blip. More importantly, deal activity accelerated through the year, with a strong final quarter. This, says Savills, indicates a good momentum to carry through into early 2026, suggesting better times for the coming year.
Investors Favour London
The market in the UK capital, London, delivered a significant outperformance, with GBP3 billion of sales, up 25% on the previous year, and 41% ahead of the average over the last decade. This performance was, in part, due to both domestic and international investors vying for assets as the London market continues to demonstrate reslience. Strong liquidity also favours those who like to invest in assets they can easily trade on, should their circumstances change.
“UK hotel transactions proved resilient in 2025 driven by a liquid single asset market, and the enduring appeal of London, which had its strongest year of investment volumes since 2018,” noted David Kellett, who heads the hotel capital markets team for EMEA at Savills. “Despite continuing cost challenges for hospitality businesses, we anticipate a strong year ahead in 2026 with more portfolio deals, building on the positive momentum in the fourth quarter of 2025.”
It was a different story in the UK regions, where a lack of major portfolio deals meant declining volumes. The GBP2 billion of hotel assets traded represented a volume down from GBP3.3 billion in 2024.
Indeed, portfolio deals overall were in short supply, with Savills adding up just over GBP750 million of such transactions – a distinct contrast with the GBP3.1 billion seen in 2024. The volume was instead substantially made up with single asset deals, and a good few of those were due to portfolio buyers selling off individual hotels purchased in bulk the previous year, something Savills define as “wholesale to retail business plans”.
A Clutch of Luxury Openings
The London market continues to absorb new supply, seemingly with little impact on rooms rates. During 2026, new openings will include several luxury properties including The Six Senses The Whiteley, Cambridge House for the Auberge Resorts Collection, and The Derby in the City of London, which will be joining Hilton’s Curio Collection.
More budget-oriented accommodation is also coming to the market, in the form of another Hub by Premier Inn hotel at Snow Hill, and a Spark by Hilton hotel opening in the second quarter in the west London district of Chiswick. And owners continue to upgrade their properties to stay with the market. During 2026, refurbishments are planned at the Landmark Hotel, while the Hilton Bankside will unveil more rooms as an extension is completed.
