The British hotel sector experienced unprecedented growth in 2024, largely driven by private equity acquisitions that propelled deal-making to all-time highs.

Last year, the total value of hotel transactions reached £6.6 billion, marking a staggering increase of 182 percent compared to 2023 and surpassing the previous record of 6 percent set in 2019, as reported by property services firm Cushman & Wakefield.

During the last quarter of the year, 87 hotels, encompassing over 12,800 rooms, were sold. This brought the annual total to 327 properties, nearly accounting for 40,000 rooms.

Investors showed a particular interest in luxury accommodations within London, which represented half of the total deal volume in 2024. The city alone witnessed transactions amounting to £3.3 billion, a remarkable 148 percent increase compared to the previous year, contrasting sharply with a 1 percent decline observed in 2023 against 2022.

The largest transaction of the year involved the £900 million sale of ADIA’s Marriott hotel portfolio to Amante Capital, a venture backed by private equity firm KKR and the American hedge fund Baupost.

This wave of acquisitions coincided with the debut of several luxury hotels in London throughout 2024, including the Mandarin Oriental Mayfair and the Park Hyatt London River Thames. Hilton is also set to introduce its first Waldorf Astoria in London at Admiralty Arch, slated for 2026.

Outside of London, the hotel market was also dynamic, with deal volumes reaching £3.3 billion, reflecting a 224 percent increase from 2023, as per Cushman & Wakefield’s analysis.

Ed Fitch from Cushman noted that this spike in activity was predominantly driven by significant portfolio transactions. He stated, “The main buyers in 2024 were private equity groups with extensive sector knowledge, showcasing their strong confidence in UK hotel investments. We foresee this confidence extending to a broader range of investors in 2025, stimulating further market activity.”

Furthermore, a separate report from CBRE predicts a 3 percent growth in revenue per available room across the hospitality sector this year, fueled by increasing demand from business clientele.

However, operators may face challenges regarding profitability, particularly due to anticipated hikes in minimum wage and national insurance contributions starting in the spring, according to Cushman & Wakefield.