Savills estimates that UK hotel investment topped £5bn in 2025 and is expected to exceed the 10-year average of £4.7bn by 7.8%, despite geopolitical and macro-economic challenges.

David Kellett, head of hotel capital markets – EMEA, Savills

The sector was particularly strong in Q4, according to the international real estate adviser, when investment volumes surpassed £2bn, more than 40% higher than in Q4 2024.

However, portfolio deal volumes for the full year declined to just over £750m, far lower than the £3.1bn recorded in 2024.

While large portfolio sales were subdued, activity in the single-asset market strengthened significantly, accounting for 85% of investment volumes in 2025, up 68% year‑on‑year.

According to Savills, investment in London significantly outperformed the regions in 2025, attracting both global and domestic investors to splash £3bn, up 25% year‑on‑year and 41% above the 10-year average.

By contrast, regional market investment volumes slowed, with fewer portfolio deals contributing to total investment of £2bn, down from £3.3bn in 2024.

David Kellett, head of hotel capital markets – EMEA, Savills, said: “UK hotel transactions proved resilient in 2025 driven by a liquid singl-asset market, and the enduring appeal of London, which had its strongest year of investment volumes since 2018.

“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.”