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UK hotels are experiencing increased operating costs due to new tax changes, including rises in employers' national insurance contributions and the national living wage. These changes, effective from April, are expected to significantly impact hotel operations, with some hoteliers anticipating price increases of around 10%. While the luxury market might absorb these hikes, mid-range hotels may struggle, potentially leading to reduced services and staffing.
In 2025, the British hotel industry saw a record surge in deal activity, with acquisitions by private equity firms driving transactions to £6.6 billion, a 182% increase from 2023. London accounted for 50% of this volume, with significant sales such as ADIA's Marriott hotel portfolio to Amante Capital for £900 million. Luxury hotel openings in London, including the Mandarin Oriental Mayfair and Park Hyatt London River Thames, have further stimulated interest.
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