The UK’s hospitality and leisure sector has long been a key driver of economic growth, contributing billions to the economy and supporting thousands of jobs. Despite challenges such as the COVID-19 pandemic and economic uncertainty, the sector has demonstrated remarkable resilience and adaptability. This has made it an attractive target for private equity (PE) investment, with firms capitalising on opportunities for value creation and long-term growth.
Why private equity sees value in hospitality & leisure
1. A resilient and recovering market
The hospitality sector has shown strong recovery trends, with UK hotel investment volumes reaching nearly £4 billion in the first half of 2024—a 210% increase from the previous year(1). Rising consumer demand for travel, dining, and experiences has reaffirmed the sector’s ability to bounce back from economic downturns, making it a compelling choice for PE investors.
2. Diverse investment opportunities
Private equity firms are attracted to the broad spectrum of investment opportunities within hospitality and leisure, including:
- Hotels and resorts – From luxury brands to budget accommodations, hotel assets offer strong revenue potential.
- Restaurants and food chains – PE-backed acquisitions in the dining sector continue to thrive, particularly in fast-casual and delivery-first models.
- Alternative accommodations – The rise of extended-stay hotels, wellness retreats and eco-friendly resorts is creating new avenues for investment.
- Entertainment and leisure facilities – Golf courses, theme parks and fitness clubs remain popular investment areas as consumer spending shifts toward experiences over material goods.
3. Driving value through operational efficiency
PE investors are known for their ability to unlock value through strategic interventions. In the hospitality sector, this includes:
- Optimising operations – Streamlining costs, improving procurement and enhancing guest experiences through technology.
- Revamping properties – Investing in renovations and repositioning assets for premium pricing.
- Expanding brand reach – Leveraging expertise to grow businesses through franchising or portfolio expansion.
4. The shift toward sustainability and digital innovation
Sustainability and digital transformation are shaping the future of hospitality investment. PE firms are increasingly backing businesses that prioritise:
- Eco-friendly operations – Energy-efficient hotels, waste reduction initiatives and responsible sourcing.
- Technology-driven experiences – AI-powered customer service, automated check-ins and personalised marketing strategies.
- Health and wellness trends – Growing demand for wellness tourism, fitness-focused resorts and mindful travel experiences.
Looking ahead: the future of private equity in hospitality
With increasing consumer demand, operational efficiencies and a shift toward sustainable and tech-driven experiences, the hospitality & leisure sector remains a prime focus for private equity investment in 2025 and beyond. As PE firms continue to deploy capital into this space, their ability to drive growth, innovation and long-term profitability will solidify the sector’s appeal in the evolving investment landscape.
The next step
As private equity continues to shape the future of the UK hospitality & leisure sector, businesses looking to attract investment must focus on operational efficiency, sustainability and digital transformation. Whether you are considering a sale, acquisition or strategic growth, understanding investor priorities is key to maximising value.
For expert advice on navigating private equity opportunities in hospitality, reach out to Irfan Topia at i.topia@uhy-uk.com or one of our hospitality sector specialists.
