Hotels can learn from the offices sector

Rental growth has also reached a 27-month high of 2.5%, according to Colliers’ latest UK Property Snapshot.

This renewed investor appetite is encouraging. But strong investment volumes alone do not guarantee sustainable profitability at property level.

For many investors, one challenge is that hotels are still operated and presented very differently from the asset class they most readily understand: offices.

Office markets are built around structured income. Long leases, pre-letting strategies and forward commitments provide visibility over future revenue streams. Rental growth is currently running at around 3.3%, the strongest level in a decade, while more than 40% of anticipated office completions this year are already pre-let. That income visibility underpins investor confidence and long-term asset values.

Hotels, by contrast, are typically framed around short-term trading performance, with metrics such as occupancy and average daily rate dominating the conversation.

While these indicators remain essential operational measures, they do not always capture the longer-term income relationships from which many hotels benefit.

Corporate retreats, repeat group bookings and exclusive-use events are becoming increasingly common as companies prioritise team collaboration and offsite gatherings. These arrangements often extend across multiple years and can provide predictable demand.

If hotels began presenting these arrangements in terms of duration and defensibility of income, rather than purely nightly rates, the sector could tell a stronger investment story.

Multi-year corporate agreements and recurring buyouts can offer the kind of visibility that institutional capital increasingly looks for.

At Burgh Island Hotel, repeat corporate retreats and returning groups form an important part of the annual business mix, creating dependable demand across the year.

As the sector continues its recovery, thinking more like landlords of long-term income streams, rather than purely operators of nightly inventory, is what will ultimately attract serious institutional capital and underpin lasting asset value.

Giles Fuchs, owner, Burgh Island Hotel