UK leads Europe in hotel investment volume for H1 2026

The UK was Europe's most liquid hotel investment market in the first half of 2026. According to research from Savills, the country accounted for 24% of the continent's total hotel investment volume during the period.

UK hotel transactions reached £2.1bn between January and June 2026. This marked an increase of almost £500m compared to the same period in 2025.

The investment activity occurred despite several economic challenges. These included moderating revenue growth, higher employer National Insurance contributions, and increased business rates. Uncertainty over a potential levy on overnight stays also persisted.

London anchors market activity

London continued to be the primary engine for UK hotel investment. The capital recorded £1.4bn of hotel transactions in H1 2026.

Buyers from Spain, Italy, Israel, and Singapore were active alongside domestic investors. The transactions referenced were completed between July 2025 and June 2026.

New investors entered the UK market for the first time. Firms including OneIM, Punta Na, and Generali each made their inaugural UK hotel acquisitions during the period.

Established players also expanded their holdings. CDL, Criterion Capital, Fattal Hotels, and the Arora Group continued to grow their portfolios, with a particular focus on London.

Regional performance and investor profile

Savills' research indicates regional performance was more mixed than London's. The firm analysed 32 UK markets.

Of those, 23 recorded year-on-year growth in revenue per available room (RevPAR). Only 10 markets were above their 2019 performance levels in real terms.

In London, the profile of investors between 2024 and H1 2026 was diverse. Owner-operators accounted for 40% of transaction volumes. Private equity was responsible for 37%.

Savills said these figures reflect continued investor interest in London's operating potential and value-add opportunities.

Market drivers: demand and supply

The investment market is being supported by strong visitor demand and limited new hotel supply. VisitBritain forecasts 44.2 million inbound visits to the UK in 2026. Visitor spending is projected to reach £33.9bn.

Supply growth remains constrained. UK room supply increased by just 0.6% in the 12 months to June 2026. Rooms under construction represented only 2.6% of the existing stock.

Savills executives provided commentary on the market's trajectory. David Kellett, head of hotel capital markets EMEA at Savills, expects the UK to retain its leading position.

"We expect the UK to retain its position as Europe’s leading hotel investment market," Kellett said. He added that future outperformance will be concentrated among well-located and actively managed assets.

Thomas Emanuel, head of hospitality thought leadership EMEA at Savills, highlighted the UK's liquidity. "The UK’s liquidity continues to set it apart from other European hotel investment markets," Emanuel stated. He noted London provides an unrivalled anchor for global investment.

Capital remains available but is becoming more selective. Emanuel said it will increasingly favour high-quality assets in locations with durable demand. Opportunities where active ownership can deliver stronger performance are also expected to attract investment.