Rise in Westcountry hotel sales as investors back tourism
Westcountry hotel sales could be set to double this year as investors see the tourism sector as a good long-term bet amid uncertain economic times, experts say.
The recent surge in activity has been revealed in the latest market overview from real estate giant Colliers International.
The company said more businesses had sold in Devon, Cornwall and Somerset during the first six months of this year than the whole of 2011.
Hotels director Peter Brunt said first-time entrants as well as experienced operators have begun to enter the market, creating a "hive of activity".
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"The key factor is that sellers are now being far more realistic in their pricing, creating opportunities that can be purchased at the right price," he added.
"There is increased confidence from buyers that this may now be the normal market for some time to come and they are seizing market opportunities."
The firm's hotels team has concluded notable sales this year including the Alverton Manor in Truro, the Camelot Hotel in Bude, the Old Ferry Inn at Fowey, the Swan's Nest near Exeter, and the Best Western Northfield Hotel in Minehead.
Malcolm Bell, head of Visit Cornwall, said he had noted "strong activity" in the market, with financiers investing for the long-term – up to 15 years.
Mr Bell said tax breaks for investors into the sector had driven recent growth.
He also claimed the domination of the budget end of the market by groups such as Premier Inn, had left the way clear for independent operators to specialise, providing high-quality boutique hotels, and concentrating on unique services and gourmet food.
"People investing in hotels are making five to 15-year development plans – it is tremendously exciting," he added.
"I am quite reassured by the level of planning activity for the next two to three years – they know that the market is going to be there because tourism is strong in the medium to long term.
"People are attracted to these destination hotels – places like the Scarlet hotel at Mawgan Porth – and investors are looking for returns over decades rather than years."
Colliers International said the major driving force had been a "realignment in prices" which made trading more acceptable to many sellers.
There is increased confidence among buyers that the current market conditions could continue for some time to come, the firm says.
Mr Brunt added: "For first-time entrants bank funding remains a challenge but there are some creative deals being done and experienced hoteliers are seeing this market as an opportunity to add to their portfolio.
"Buyers are aware that correctly priced hotels offer good value for money at an acceptable risk, as well as a home and good income.
"Investors who are looking for a bargain are struggling as there is clearly a shortage of stock."