Forget London, Oxford Is The New Hotel Investment Hot Spot

London is not the only British city spoiled for choice in fine hotels. Colliers International recently named Oxford one of the top UK locales for hotel investment.  

Oxford rose from 28th place last year to third in the index, which analyses 34 locations across the UK and ranks them according to a set of nine key performance indicators.

Peter Brunt, hotels director at the Bristol office of Colliers International, said the data reveals the ever-changing nature of the UK hotels market.

“Oxford has really upped its game in the last year to make it into the top five, despite failing to score in the top 15 last year,” Brunt said. 

Oxford improved its ranking by 25 spots due to an increase in buyer demand interest, a low active pipeline in the city and good hotel market performance. 

The nine key performance indicators used in the Colliers International UK Hotels Market Index are land site prices, build costs, market appetite, valuation exit yields, room occupancy, average daily rate, room occupancy rates, four-year RevPAR trend, and active pipeline as a percentage of current supply and construction costs.

The ratings are consolidated into a single figure and ranked to show which markets are hot in terms of a desirable location for investors to acquire an existing hotel or develop a new one.

Brunt said Oxford is often at the top of buyers’ wish lists. “It has a golden glow for buyers because of the heritage that drives tremendous tourism demand for bed spaces,” he said.

Colliers head of hotels and resorts consulting Marc Finney said London is by far the largest market with almost as much supply as all of the other markets combined, and has recently been a star in terms of revenue per available room. However, it is 12th in this year's ranking due to slow growth in 2016, high construction costs and high land values.