The pandemic last year brought about a “turbulent year” for hotel trading performance, with UK hotel investment in 2020 declining by 70% year-on-year, according to the latest figures from Knight Frank.

Knight Frank’s Hotel Transaction Trends 2021 research analysed the total investment trends in the UK hotel sector, which saw investment volumes in 2020 total £1.8bn, compared to total investments of £6bn in the previous year. Furthermore, it found that 81% of the transaction volume occurred in Q1-2020 (£1.5bn).

London, which accounted for 76% of the total UK volume, witnessed a decline of 49% in transaction volume, with the sale of The Ritz contributing £750m to the capital’s total investment of £1.4 bn.

Knight Frank said economic disruption, forced temporary hotel closures as well as restrictions on travel and social engagement all contributed to the level of hotel investment being severely curtailed, with a dearth in portfolio activity.

Whilst overseas investment declined by 44%, Qatari, Israeli, USA, Singaporean, Thai and European investors accounted for 63% of the total UK hotel investment.

Henry Jackson, head of Hotel Agency at Knight Frank, said: “Despite the extreme challenges that the UK hotel sector is enduring, the long-term fundamentals remain positive and the sector will recover as the economic landscape starts to revive.”