What Are Investment Hotels And Why Is The Sector Growing?
A special type of real estate investment, hotel investment is one which is booming across many parts of the world. Hotel investment is a branch of the hospitality industry which is a science as well as an art. In hotel investment, multiple parties are required to carry out different functions. The investment in hotel serve as an alternative to the traditional investment in the real estate realm; it serves as a diversification for the real estate investment.
Lately, the hotel investment sphere is increasing in popularity and high yields are surfacing for many investors. There is the hotel room investment which sees largely to purchasing hotel rooms and this tends to provide passive income in conjunction with regular and stable income. Hence, you might also want to ask: what are investment hotels and why is the sector growing?
Why the hotel investment sector is growing
In the UK, £5.5 billion was recorded in the year 2017 as the sum of the investment volumes in the hotel investment sector. Comparing this to the penultimate year’s assessment, it amounts to a 44% rise in investment activity in the hotel sector. Also, investors from overseas is booming and an increasing regional representation also manifests in the UK making up to 56% of the whole investment.
Furthermore, hotel rooms can be purchased in the UK and this will raise high yield considering the 2013 VisitEngland statistics of more than 10 million trips that are made domestically to the UK. The investment is passive and the capital tends to increase at a good rate. Unlike other investment form, purchasing a hotel room will not require a monitored maintenance or management.
Moreover, in some situations, hotel rooms’ purchase unlike other forms of purchases in many other sectors also allows for personal use. Holidays can be spent in the hotel rooms and a brief stay can be achieved with ease. This remains a promising investment option in the hotel investment sector with the strong passive income and a high yield and return.
In France, the WTO assessment shows an 837 million incoming international tourist coming into the region, and the INSEE rate shows an overall rating of France as the global attraction center for tourist.
These and more show the reason why the hotel investment sector is the new world’s choice in the real estate investment.
Even more, investment in hotels attract more investors with the following:
- High rate of demand cutting across every season and region.
- Attractive purchase of hotel rooms in the UK in regards to the stamp duty as a purchase which reaches £150,000 will not attract a UK Stamp duty.
- All-time surge in the rate of passive income and in the yield of return for investors.
- Regular and stable income which is long term.
- Diversification means from real estate businesses.
- Guest arrival booming in successive years with a sizeable amount of percentage increase in the amount of guest in hotels across the world.
- The high affordability nature of the purchase of hotel rooms and the passive income therein keep attracting regional and oversea investors.
- Ground rent and leasing also form major mediums for hotel investment.