The Bank of England base rate is 3.75 percent, held since the December 2025 cut, UK hotel occupancy ran at around 76 percent through 2025 (STR /CoStar), and JLL points to strengthening debt markets and record dry powder driving hotel investment this year. In this launch episode of
Hotel Property Finance, host Georgina lays out a full 2026 market outlook on how UK hotels are funded, what the numbers look like right now, and what the market is telling owners, operators and investors.

We explain the single most important idea in hotel finance: a hotel is not just a building, it is a trading business that sits inside one, and
lenders fund both together. We cover the metrics that decide everything, RevPAR (revenue per available room), ADR, occupancy and EBITDA, and why hotels are valued on a going-concern basis that reflects the income the operation produces.

We then walk through the funding routes that actually move the sector:
- Acquisition finance for buying a trading hotel
- Development and refurbishment finance for building or upgrading
- Refinance and equity release, which dominates the 2026 market
- Bridging for auctions, chain-breaks and transitional situations
- Mezzanine to stretch leverage behind the senior lender
- Owner-operator and investor structures, including op-co / prop-co
- Group and portfolio finance for multi-hotel owners

We give the indicative 2026 numbers: senior term debt broadly 6.5 to 8.5 percent all in on 10 to 25 year terms, loan to value around 55 to 70
percent on a going-concern basis, development sized around 60 to 65 percent of cost and value, bridging around 0.85 to 1.25 percent a month,
mezzanine around 11 to 18 percent a year, and debt service cover often around 1.4 to 1.75 times.

We close on what is actually happening: a refinancing-led, selective market, with very large refinancings of landmark London hotels,
group-level refinancings of established collections, specialist lenders funding new branded budget and lifestyle hotels, and genuine distress at
the weaker end including a West End hotel guided above 275 million pounds.

Read the full report
https://hotelpropertyfinance.co.uk/

Across our site network

We provide a variety of narrative on our report across our network via/:
- Hotel property Finance Market
- Hotel Acquisition Finance
- Hotel Development and Refurbishment Finance in 2026

- Hotel Refinance Equity Release
- Owner Operator and Investor Finance for Hotels
- Distressed Turnaround Repositioning Hotels
- Hotel Bridging Finance
- Hotel Group Portfolio Finance

Sources
Figures cited are drawn from STR / CoStar, JLL, Savills, CBRE and Knight Frank, plus Construction Capital planning data. All figures are
third-party research-house estimates and indicative market commentary.

About
Hotel Property Finance is the practitioner podcast on funding UK trading hotels. We help people who own, run, buy or invest in hotels understand how lenders price and underwrite the sector, and how acquisition, development, refinance, bridging, turnaround and portfolio funding actually work.

This episode is general market commentary, not financial advice, and not an offer of any kind. We are not FCA authorised. Commercial finance for trading hotels is unregulated business lending. Where a deal needs regulated advice, it should go to a regulated firm.

Written brand author: Matt Lenzie. Host: Georgina.

For hotel finance enquiries, visit https://hotelpropertyfinance.co.uk/