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The UK Hotel Market 2017

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The UK is set to see a boost in overseas tourism as a result of the weaker pound following last year’s EU referendum.

PWC expects growth in the first half of 2017 to build on from the strong sector performance at the end of 2016 driven by the fall in the pound and a more resilient than expected UK economic performance in 2016.

Occupancy remains high and is expected to grow 0.9% to 82% in 2017, while average daily rate (ADR) is set to increase 2.4% to £146. Occupancy is expected to increase a further 0.5% in 2018 with ADR set to increase 2% to £149.

In general, demand continues to outpace supply growth but supply continues to increase, this year is expected to see 20,000 rooms added to the UK hotel supply up from 16,000 in 2016. For the UK regions, overall hotel capacity could expand by 12,000 rooms in 2017, meaning a 2.4% net rise – one of the highest growth rates since 2008.


The UK hotel market is a consumer driven real estate sector with performance closely linked to the overall general economy. This is particularly true of the regional hotel market due to its largely domestic nature.

“The effects of a weaker pound were finally felt by hospitality businesses towards the end of 2016 with inbound holiday tourism soaring.

Its forecast for the UK regions in 2017 and 2018 shows, despite a slower start outside London in 2017, hoteliers will see RevPAR growth of 3% to £54, driven almost exclusively by an improving ADR to £71 – the highest ever in nominal terms.

Occupancy is projected to remain high at 76%, but growth is muted in both 2017 (0.1%) and 2018 (0.2%). PwC anticipated that RevPAR growth will slow to 1.7% in 2018, supported by a 1.5% ADR improvement taking rates to £72.

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