Plenty of capital still wants to be in UK hotel markets: Simon Mallinson

by | 14 Jun 2020 | Experts

Simon Mallinson was a delegate at TOPHOTELWORLDTOUR London 2020.

Provided sensible heads prevail in negotiations, the hotel industry and UK PLC at large can benefit from Brexit, says Simon Mallinson, Executive Managing Director at Real Capital Analytics.

Simon Mallinson is unapologetically and unmistakably pro UK PLC. Running Real Capital Analytics’s (RCA) business in Europe and Asia, he has decades’ long background in the hotel sector.

Mallinson spoke exclusively to TOPHOTELNEWS about the Brexit effect on hotel investment and why he recommends a strong buy for UK PLC — provided sensible heads prevail in negotiations. This pre-Covid interview was conducted on the sidelines of TOPHOTELWORLDTOUR London 2020, which took place on February 6 at the Conrad St James.

2019 a strong year for UK hotel investment

Mallinson: 2019 hotel investment numbers are a little bit lower than 2018, but if you look back historically, 2019 was still a really strong year for UK hotel investment, which is a real positive. I take away that there’s still plenty of capital that wants to be in the UK hotel markets. That’s a positive.

If you looked at the monthly numbers, in December 2018, we saw the “Boris Bounce.” There were a lot of hotel deals that went into contract during the year that didn’t complete because people were a little bit uncertain about the direction, and what was going to happen with the election. Whatever your politics is, it does mean there’s certainty going forward, and that’s what investors like.

Detail on an eventual Brexit is key 

Mallinson: What I would say going into 2020 is that while there is certainty now about who is in charge and who can make the decisions. We don’t really have much idea what the eventual Brexit will be because we’ve only entered the transition period. The hardest part of that negotiation is about to start because now you get lots of national interests competing.

So what I would advise is caution since while we’ve seen that boom in December, it doesn’t necessarily mean it’ll feed into 2020. We might still see the UK investment market be a little bit sluggish as people try to adjust and to try to figure out what the next decade means for them.

On why he believes in brand UK PLC

Mallinson: I think partly because of the size of the economy. Whatever your politics, whatever you think might happen with Brexit, this is a large country with a very deep pool of wealth. Whether it’s a domestically orientated market in the future or whether it still is able to take foreign direct investment and whether it’s still lots of cross border money and whether it’s open to trade for Europe, I think you’ve still got to bet that the size of the economy and the wealth of the people could still deliver at least an average type of return going forwards. I’m optimistic that sensible heads will prevail in negotiations.

Thoughts on TOPHOTELWORLDTOUR

Mallinson: It was my first time at TOPHOTELWORLDTOUR. The opening session on networking was interesting: I took away a few tips about having that 15-second explanation of what I do and what the company does and related keywords. The event is really well set up for networking. 

Simon Mallinson was a delegate at TOPHOTELWORLDTOUR London 2020. To attend, address or sponsor our boutique hospitality networking events around the world, contact the TOPHOTELPROJECTS team.

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