There is a new wave of interest in hotel rooms as an alternative investment opportunity. The opportunity arises from the purchase of individual hotel rooms rooms rather than investment in the whole hotel. This gives investors a chance to benefit from the high yielding hospitality industry for a fraction of the cost.
There are approximately 730,000 hotel rooms available in the UK, with an estimated revenue of £40 billion. The drop of the pound has made the UK an affordable holiday destination and the number of Brits choosing a staycation instead of travelling abroad is forever on the rise. These are said to be the main factors contributing to the 5% increase in occupancies this year alone, which in turn have triggered hotel room prices to increase. Increase of occupancies and room rates are therefore continuously improving returns for investors.
Hotel rooms are a hassle-free investment given the nature of the operation, the room is embedded in a fully functional business making this a perfect option for passive income. When compared to investing in holiday homes, hotel rooms offer less flexibility and control. Holiday homes are classed as Furnished Holiday Lets (FHLs) meaning the property needs to be advertised for just 210 days per year and only occupied by the public for 106 days per year. Additionally, FHLs benefit significantly from a tax point of view with the government granting small business council tax, claims on capital allowance, capital gains relief as well as tax relief on pensions.
HyLife is the London based five star leader in alternative investments creating win-win relationships with investors. We believe in offering factual and educational information to our investors to ensure they fully understand each product before investing. All investors are given a portfolio manager who will actively seek the best opportunities in the market for the investor based on their portfolio characteristics.