hotel-finace-expectations

Expectations for Hotel Financing In 2018

In broad terms the most honest and accurate way to describe the British economic outlook is “uncertain”. We take no pleasure in saying this, but there is no hiding from it. There are several well documented factors contributing to this, ranging from ‘Brexit’ through to global concerns.

An easy assumption to make when faced with this is that an “uncertain” economic outlook is defined as “doom and gloom”. This is not the case. Whilst no sector is completely insulated from the impact of current events, not all are adversely affected. In order to best illustrate this we’d like to take a look at the expectations for hotel financing in 2018 and beyond.

Our specialist financial experts rely on knowledge and information in order to provide the best service possible for hotel financing. A key example of this is reading, understanding and implementing the economic studies and forecasts for the hospitality sector. The most recent of these to be published is the PwC UK Hotels Forecast 2018. It makes fascinating and informative reading.

The report notes that the overall UK GDP growth for 2018 is anticipated to be 1.4%, a slight drop on the 2017 figure. For hotels, however, the RevPAR (revenue per available room) growth figure is expected to be 2.3%. This is based on a hotel room occupancy rate of 76%, a figure which is highly likely to be achieved.

What we believe this represents is a confidence in the strength of the UK hospitality sector. It also means that hotel financing in 2018 will remain available, despite the uncertain economic outlook in a general sense.

In order to understand how the RevPAR growth is expected to outpace GDP growth we must consider the consequences of the current uncertainty. The weaker Pound Sterling is the factor which has, as strange as it may sound, been of the most benefit to the sector.

2017 has shown that a weaker Pound Sterling can deliver benefits to the hospitality sector. This comes via two streams. Firstly, a weaker currency exchanges sees a far higher number of UK citizens opt for a “staycation” holiday, as it provides better value. Secondly, from the other side of the exchange rate the UK becomes a far more attractive holiday destination for overseas visitors.

At Stewart Hindley we are moving ahead with confidence about hotel financing in 2018. The factors which make the UK hospitality industry successful remain in place, despite any general economic uncertainty.

There are many lenders who will see hotel financing in 2018 as a primary investment goal. Gaining access to this finance relies on you getting the best people possible involved on your behalf. At Stewart Hindley we have a proud track record for being the best people. We are here to help you secure financing for your hotel or hospitality business. Please contact us on 01488 684834. We’re looking forward to hearing from you!