How to buy a hotel in the UK

What you are actually buying

A hotel is a trading business attached to a property. When you buy one you are buying the earnings of that business, the property it operates from and the goodwill of an established hotel. This is why lenders and valuers look first at how the hotel trades, through occupancy, ADR and RevPAR, not only at the building. It is also why a hotel purchase is more involved than a standard commercial property deal: you are taking on staff, bookings, suppliers and reviews as well as bricks and mortar.

This guide covers buying a hotel as a business. It is not about booking a stay. If you are acquiring, developing, converting or refinancing a hotel, read on. A small owner-run guest house occupied as a home can be a regulated case, which we refer to an authorised firm.

The buying process, step by step

1. Set your strategy and budget. Decide on segment, location, freehold or leasehold, and whether you want a trading hotel or a repositioning project. Agree how much equity you can put in and what you need to borrow.
2. Find a hotel. Specialist agents such as Christie and Co, Savills and Knight Frank, plus marketplaces, list trading and closed hotels. Closed or underperforming hotels are repositioning opportunities but carry more risk.
3. Make an offer and agree heads of terms. These set the price, what is included, whether shares or assets, the property, fixtures, FF&E and goodwill, and an exclusivity period.
4. Commission a specialist valuation. A hotel valuer assesses the hotel on a going-concern basis using its maintainable EBITDARM, which underpins both your price and the lender's offer.
5. Carry out due diligence. Review three years of accounts, occupancy and ADR, the booking mix, staffing, the property condition, licences, leases and any seasonality or local dependence.
6. Arrange finance. We approach lenders that understand hotels, agree indicative terms, then move to a full credit application and a lender valuation.
7. Exchange and complete. Funds draw down, ownership transfers, and you take over as the operator, with staff transferring under TUPE and bookings novated across.

How much money you need

The headline figure is the deposit. On a going-concern purchase lenders typically fund up to around 65 to 70% of value, so plan for a deposit of roughly 30 to 35%. On top of that you need money for fees, stamp duty and a working-capital buffer for the first months of ownership.

There is no single national price for a hotel. Knight Frank put going-concern price per room in 2025 at around 315,000 pounds in London and around 129,000 pounds regionally, while Cushman and Wakefield put the UK average at around 142,000 pounds per room in H1 2025. The wider market has been active, with Savills reporting around 3.01 billion pounds of UK hotel investment year to date in 2025 after a record 6.6 billion pounds in 2024 per Christie and Co.

What you actually pay turns on the trading, not the price per room. Two hotels of the same size in the same town can be worth very different sums if one is full and well priced and the other is half empty and discounting, because the value follows the maintainable EBITDARM. Use the per-room figures as a sanity check, then anchor your offer to the sustainable profit the hotel can produce in your hands, tested against the local market. Overpaying against an optimistic forecast is the most common way a hotel purchase goes wrong.

Due diligence: what to check

Due diligence is where a good purchase is protected and a bad one is avoided. Beyond the headline accounts, look hard at the quality and consistency of the trading, the condition of the building and the FF&E, the bookings on the forward calendar, the staffing and any reliance on key individuals, the licences and any leases, and the source of demand. A hotel that depends heavily on a single corporate account, one event a year or high-commission third-party bookings is more fragile than its top line suggests.

• Three years of accounts and the latest management figures, normalised
• Occupancy, ADR and RevPAR trends, and the booking and channel mix
• Building condition, outstanding repairs and the FF&E replacement need
• Forward bookings, deposits held and any deferred income
• Staff contracts, TUPE position and reliance on key people
• Licences, leases, planning, and any local-authority or competitor risk

Is buying a hotel profitable

It can be a strong long-term investment when the hotel is well located, well traded and well run, because room revenue compounds with occupancy and rate, and the asset can appreciate. London prime yields sit around 5 to 6% per Cushman and Wakefield H1 2025, and PwC forecasts London and regional RevPAR rising modestly in 2026. But a hotel is an operating business with trading, staffing, seasonality and cost risk, so returns depend heavily on how well it is run. Owner earnings vary widely by size, location and segment, from a modest living on a small guest house to substantial profit on a large, well-traded hotel.

First-time buyer or experienced operator

Experienced operators with a track record generally secure higher leverage and keener pricing because they reduce the lender's perceived risk. First-time buyers are not shut out, but they should expect more questions on management, a larger equity contribution and closer scrutiny of the hotel's trading. We position both types of buyer to the lenders that suit them, and a strong management team or a brand affiliation can bridge a gap in personal experience.

• A credible business plan with realistic occupancy and ADR assumptions
• Evidence of how the hotel will be run, staffed and marketed
• A clean, verifiable deposit and a working-capital buffer
• For first-timers, an experienced manager, operator or brand partner

A note on regulation

Buying a hotel as a trading business is funded with unregulated commercial lending outside the FCA mortgage perimeter. Where the purchase is a regulated owner-occupier case, for example a small guest house lived in as a home, we refer it to an authorised firm. We act as an arranger and introducer and do not lend. All figures here are indicative and never an offer of credit.