Hospitality investments made simple—buy hotels across prime UK locations with Fraser Bond's expert guidance.
A hotel is not valued like a building. It is valued like a business that happens to own one. The method is fair maintainable trade — what a reasonably efficient operator could earn here, not what the current owner does earn — capitalised into a figure. Which is why two hotels with the same room count and the same postcode can be worth very different sums, and why the accounts matter more than the square footage.
Three years of certified accounts, occupancy, average daily rate and revenue per available room, and the split between rooms, food and beverage, and events. Then the question that decides the price: how much of that trade is attached to the building and how much walks out with the current operator.
Freehold with vacant possession, trading with staff transferring, let to an operator on a lease, or run under a franchise or management agreement. These are four different investments with four different risk profiles, and the marketing particulars frequently blur them. We establish which one you are buying.
Premises licence and its conditions and hours, food hygiene rating, fire risk assessment, and the deferred capital expenditure every tired hotel carries. Soft refurbishment cycles come round faster than owners budget for, and an unspent refurbishment is a discount you should be taking, not a surprise you absorb.
Our fee is paid by the vendor or the landlord. No fee to you and no retainer — and no reason for us to talk up a trade because the incentive is better on our side.
Whether you intend to operate, to appoint a manager, to let to an operator or to convert. Room count and location matter, but the intention decides everything else — what you need from the accounts, whether staff transfer, whether the licence must be maintained, and what a lender will want to see.
Three years of accounts where they exist, occupancy, ADR and RevPAR, the revenue split, the tenure and operating structure, premises licence and conditions, rateable value and multiplier, the fire risk assessment position, and the refurbishment cycle — before you travel to view.
Deferred capital expenditure, staff liabilities transferring under TUPE, the franchise or management agreement terms and termination rights, whether the licence transfers cleanly, and what the trade would be under a competent operator rather than the one leaving. Then we negotiate against that, not against the asking price.
Most commercial property is valued by reference to comparable rents or prices per square foot. Hotels are not. They are trade related, and the standard approach is the profits method: establish fair maintainable trade — the level of trade a reasonably efficient operator could achieve at the property, not necessarily what the current owner achieves — derive the maintainable operating profit from it, and capitalise that.
Two consequences follow, and both are routinely missed. First, a hotel trading badly under a tired or absent owner may be worth considerably more than its accounts suggest, because the valuation is based on what a competent operator would do. Second, a hotel trading exceptionally because of a particular chef, a particular manager or a book of corporate contacts may be worth considerably less than its accounts suggest, because that trade is personal to the operator and does not transfer with the freehold.
The question to ask of every set of accounts is therefore not "what does it earn?" but "how much of this walks out of the door on completion?" Corporate rate agreements, wedding and events bookings, and online review history are the places to look. A strong forward bookings position that is contractually transferable is worth real money; a strong reputation attached to a departing individual is not.
Hotels are offered in structures that look similar in particulars and are not similar at all. Freehold with vacant possession means you take an empty building and all the operating risk, and you can reposition it entirely. Freehold going concern means you buy the trade with it, usually with staff transferring under TUPE, which brings continuity and also brings employment liabilities you need to quantify before exchange.
A hotel let to an operator on a lease is an investment rather than a business: you receive rent, your risk is the operator's covenant and the lease terms, and your upside is limited to the review mechanism. A franchise or management agreement sits between the two — you own the trade and the risk while a brand supplies the name, the booking system and standards, in return for fees and a set of obligations including mandatory refurbishment cycles.
Hotels are hospitality, so from 1 April 2026 they fall on the lower retail, hospitality and leisure multipliers that replaced the annual relief scheme: 38.2p below £51,000 rateable value and 43p from £51,000 to £499,999, against 43.2p and 48p for non-RHL uses. At £500,000 and above the multiplier is 50.8p for every use, hospitality included, so the advantage disappears entirely at the top of the market.
Hotel rateable values are themselves assessed differently from most property, by reference to receipts and expenditure rather than rental comparables — which means the assessment is tied to the trade. If trade has fallen materially since the valuation date, that is a reason to look at the assessment rather than simply pay it. 2026 is a revaluation year, so check the current entry rather than relying on a historic bill.
A hotel's premises licence under the Licensing Act 2003 carries conditions and permitted hours, and those conditions are specific to the premises and the licence holder. A licence does not transfer automatically on sale — it requires an application to transfer, and the designated premises supervisor must be in place. Build the timing into the transaction rather than discovering it a week before completion.
Fire safety is the area where liability has tightened most. A hotel is a sleeping-risk premises, which places it at the serious end of the Regulatory Reform (Fire Safety) Order. Obtain the current fire risk assessment, establish who carried it out and when, and read the action plan rather than the summary. Outstanding actions are a cost and, until they are closed, a liability. The same diligence applies to the food hygiene rating, gas and electrical certification, and legionella testing.
Hotels sit in Use Class C1. That class is distinct from residential (C3), from houses in multiple occupation (C4) and from residential institutions (C2), and movement between them is a material change of use requiring planning permission. For anyone buying a hotel with a view to converting it — to apartments, to serviced apartments, or to supported or temporary accommodation — the permission is the deal. Establish the planning position and the likely local policy stance before you price the building, not after.
The reverse is equally true: a building being marketed as a conversion opportunity on the strength of an aspiration rather than a consent is being priced on something that does not yet exist. Ask whether there is a permission, whether it is implemented, and when it expires.
On its trade, not its floor area. The standard approach is the profits method: establish fair maintainable trade — what a reasonably efficient operator could achieve at the property rather than what the current owner does — derive maintainable operating profit, and capitalise it. That is why a badly run hotel can be worth more than its accounts imply, and a brilliantly run one worth less if the trade is personal to the departing operator. Square footage barely enters it.
Only partly, and the split is the single most important thing to establish. Contractual forward bookings, corporate rate agreements and transferable event deposits generally do carry over. Reputation attached to a named chef or manager, and informal relationships that have never been documented, generally do not. Ask for forward bookings in writing with their terms, and discount anything that depends on an individual who is leaving. That discount is usually where the negotiation actually happens.
If you buy a trading hotel as a going concern, TUPE will usually apply and the staff transfer to you on their existing terms, with continuity of service preserved. That is not optional and the associated liabilities — accrued holiday, notice entitlements, any outstanding claims — come with them. Obtain a full staff list with service lengths and terms during diligence and price it. Buying with vacant possession avoids this but means you start with no team at all.
No. A premises licence under the Licensing Act 2003 requires an application to transfer, and the designated premises supervisor must be properly in place. The licence also carries conditions and permitted hours specific to that property, which may be more restrictive than you assume. Review the conditions during diligence, not after, and build the transfer timing into the transaction — it is a routine step that becomes an expensive one when it is left to the week before completion.
Not without planning permission. Hotels sit in Use Class C1, which is separate from residential C3, HMOs in C4 and residential institutions in C2, and moving between them is a material change of use. If conversion is your plan then the permission is effectively the deal, so establish the planning position and the local policy stance before you price the building. Be wary of anything marketed as a conversion opportunity on the basis of an aspiration rather than an actual consent.
