Property Investment in the Hospitality Industry

Posted by The Landsite on 11th January 2024 -

For prospective property investors looking to enter the hospitality industry, guest houses and bed and breakfasts (B&B’s) in particular, are becoming an increasingly appealing investment choice.  

Several factors contribute to their continued popularity: 

Staycations

Its official, Brits love staycations!  The trend for shorter holidays at home is set to continue for many of us in 2024.  The rising cost of airline travel coupled with the cost-of-living crisis has resulted in an increase in the number of holiday makers enjoying shorter trips across the UK.

In addition, soaring temperatures in Europe during the summer of 2023 and raging wildfires spelt disaster for many holiday makers in tourist destinations such as Greece and Italy as well as record breaking temperatures in Spain and France.  

Recently, Blackpool was listed as one of the destinations UK holidaymakers are swapping the beaches of Benidorm for.  With many contributing factors to consider, we ask the question: is 2024 the right time to invest in the B&B sector in the UK?

Immersive Travel

The UK's tourism industry remains strong post pandemic, attracting millions of domestic and international visitors annually.  

The ongoing trend of experiential or immersion travel is influencing consumer preferences across the globe.  Travellers are opting for unique experiences and destinations in which to immerse themselves in the culture of the country.  In the UK, guest houses and B&Bs, with their personalised touch and homely atmosphere, cater to this niche market of tourist seeking a more intimate and authentic experience.  Often found in remote villages, and off the beaten track spots, guest houses allow visitors to explore local and surrounding areas.

Data from Statista shows that In 2023, the share of Britons taking a domestic summer holiday, or 'staycation', in the United Kingdom (UK) increased by 50 percent compared to the previous year.  According to the survey, 63 percent of the respondents planned a staycation in 2023, whereas about 42 percent of Britons did the same in 2022. 

England’s tourism minister Sir John Whittingdale states that from April to June (2023) alone, Brits spent £8 billion on 29 million ‘staycations’, helping boost the economy on a national and local level and supporting the livelihoods of millions of people.  The government’s Tourism Recovery Plan is to reform tourism boards - known as Destination Management Organisations - across the country, including in areas off the beaten track, to help them attract more tourists and major events to the UK. 

Online booking platforms

The rise of online platforms and booking websites has made it easier for smaller establishments to reach a broader audience. 

Online searches for staycations are now consistently above holidays abroad throughout the calendar year, whereas previously there was little disparity between the two.

Investing in effective online marketing and maintaining a strong online presence can significantly boost the visibility and bookings for guest houses and B&Bs.  With the right strategies, guest house and B&B owners can tap into the growing digital market and attract a steady stream of guests. 

Remote locations 

Its worth noting, the COVID-19 pandemic has reshaped travel patterns, with many individuals preferring smaller, more secluded accommodation.  Guest houses, boutique hotels and B&Bs, are often located in out-of-town neighbourhoods or villages, offering a safer and more private environment for travellers concerned about crowded spaces.

While the potential for a profitable investment is evident, it remains crucial for property investors to conduct thorough market research, consider the regional demand, the competition, and regulatory requirements.  

Are you looking for hotels, guest houses or B&B’s? Contact The Landsite for the latest listings or search online for all licensed and leisure properties for sale across the UK. 

Looking for finance for a potential hospitality property or redevelopment project?  Source trusted finance lenders on The Landsite. 

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