By Giles Fuchs, Owner of Burgh Island Hotel
The return of capital to the hotel sector over the past year is encouraging, but it should also prompt a practical question for owners. If investors are clearly interested in hotels again, the question for hotel owners is how they can make their businesses an attractive proposition for investment.
The numbers make the opportunity clear. £5 billion was invested into UK hotels in 2025, above the long-term average of £4.7 billion. Across Europe, transactions reached roughly €27 billion last year. Capital is moving into the sector because investors recognise that good hotels remain attractive assets. How that capital is allocated, however, has changed considerably. A growing share now focuses on individual properties rather than large portfolios. Investors want to understand exactly what they are buying: the building, the business, and the realistic potential to improve both over time.
For hotel owners, that shift places greater importance on the basics. A property that has been consistently looked after stands out immediately. Regular refurbishment, sustained reinvestment and well-maintained infrastructure give investors’ confidence that the asset will not require constant corrective over-spending.
Hotels occupy a unique position within the property world. They combine investment in real estate with an operating business, which means owners have genuine agency that most asset classes simply do not offer. A commercial office block will perform broadly in line with its market. A hotel can significantly outperform its peers through decisions made at ownership level. At Burgh Island, we have taken occupancy to 93%, and are expecting to exceed 95% this year, not by departing from the hotel's character but by investing in it, tightening operations, restoring original features, and deepening the guest experience. The asset's distinctiveness became the commercial engine. When that approach is applied with discipline, the results can be significant for investors and the wider local economies these properties anchor.
Identity matters just as much as condition. Hotels that feel distinctive carry a narrative that is easier for both guests and investors to believe in. Investors favour clarity over complexity, a hotel with a coherent proposition, consistent standards and a well-defined audience is considerably easier to back with long-term capital.
The operating environment is not without pressure. Rising employer national insurance, business rates, and hiring costs are all weighing on margins. As a result, strong operational management and investment in long-term staff are not just good practice — they increasingly distinguish the hotels that attract serious capital from those that do not.
The encouraging news for owners is that demand for hotels as an asset class has not gone away. Travel is one of the few sectors that has demonstrated genuine structural resilience, not just recovery, but sustained growth in the face of successive economic headwinds. Well-positioned properties continue to attract serious attention from private investors, institutional capital, and family offices alike. But capital is selective, and that selectivity is sharpening. Investors are looking for hotels that have been cared for, clearly positioned, and run as serious businesses. When those elements are in place, a hotel is not merely an attractive investment, it is one of the most compelling long-term assets the property world has to offer."
