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  • Views from the flipside
  • Good news for UK hotel sector as profitability rises

Views from the flipside

Research conducted by LDF has revealed that the profit margins for the UK hotel sector have risen by more than a quarter in the last year, to 4.5% from 3.5% in 2014. The rise is driven by the demand for rooms outside of London, which is great news for hotels across the UK.

Occupancy levels outside of London are expected to hit an all-time high of 77% in 2016, as more tourists choose to visit the UK’s many great attractions beyond the capital.

Peter Alderson, LDF Managing Director says "this is encouraging news, showing a thriving hotel sector despite increased competition from new alternatives like Airbnb."

However, Peter warned that this may mean an increased pressure for smaller regional hotels to attract visitors, "Consumers have more options than they did previously and this means that independent hotels need to work harder to appeal to guests that favour well-known chains."

UK Hotel Sector Finance Support

Refurbishment benefits

Independent hotels in regional areas may be thinking of improving their offerings in order to compete with these larger chains. Guests now expect services such as Wi-Fi to be available throughout the building as well as up to date décor and facilities.

Modernising and refurbishing can be an expensive outlay for smaller hotels, and so, many may require help with financing this expenditure through alternative funding options.

Peter explains that there are plenty of options available to hotels looking to invest in their business without taking up significant cash resources. "Many hotels’ occupancy levels will rise and fall depending on the time of the year, and so finance can help hotels to keep investing in their business even when they have a reduced cash flow.”

LDF offer a variety of finance options to UK hotels, which can aid in spreading the cost of business development plans over a manageable term. In addition to Refurbishment and Expansion, LDF can also assist in facilities to spread the cost of Tax and VAT.

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Views from the flipside

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