Are you a hotel operator looking for bank funding? Here’s what you need to know

Securing hotel finance in the UK is more than just finding a lender. It’s about understanding the current market, knowing what lenders expect, and choosing a funding solution that supports your long-term goals. Whether you're running a boutique hotel, planning a luxury development, or refinancing an existing property, the funding landscape has shifted in recent years and being prepared is key. 

At Christie Finance, we help hospitality businesses access tailored solutions, from hotel mortgages and development finance to refinancing and asset-backed lending. Here’s an update on what’s happening in the market and how you can position your business for success. 

Hotel investment and financing trends in the UK 

In 2024, hotel transaction volumes exceeded £6.6 billion, marking the strongest year since 2018 and 3.5 times higher than in 2023, as reported in Christie & Co’s Hotel Market Review. While there has been a year-on-year decline in transaction volumes in 2025 compared to 2024, we have seen a rise in single asset hotel sales, compared to 2024 when large portfolio activity dominated. We are also seeing a shift in who is buying: in H1 2025, domestic buyers made up nearly 60% of the market, up from 35% last year. Private capital and HNWIs are more active, while institutional investors remain strong but slightly down.

Hotel financing is certainly on the table, but lenders are being more selective. They’re looking for stability, performance, and a clear strategy. The appetite is there, but the criteria are tighter. 

What to expect when applying for hotel loans or mortgages 

Traditional lenders are still active, but their approach has become more cautious. If you're applying for a loan or hotel mortgage, expect a more strategic review process. Banks are prioritising: 

• Refinancing over speculative development 
• Sponsor experience and operational performance 
• Lower loan-to-value ratios and tighter covenants 

Large-scale funding is still available, but it’s typically reserved for operators with a strong track record and a clear business model. 

 Key factors for securing hotel development finance 

If you're planning a new build or major refurbishment, hotel development finance is still accessible, but lenders want to see a solid foundation. Here’s what they’re looking for: 

• Operational performance 
  Lenders want to see consistent revenue, healthy occupancy rates, and strong margins. Post-pandemic recovery data is especially important. 
• Experienced management 
  A credible team with sector-specific experience adds weight to your application. Whether you're refinancing or expanding, your leadership matters. 
• Clear business plan 
  Your plan should include financial forecasts, market analysis, and a clear strategy for growth or repayment. Detail and clarity are essential. 
• Quality assets in prime locations 
  Properties in desirable or emerging areas are more likely to attract funding. Lenders assess long-term viability and demand drivers. 
• Equity contribution 
  A strong equity stake shows commitment and reduces lender risk. This is especially important for development and conversion projects. 
• Exit strategy 
  For bridging or development finance, lenders want to know how and when the loan will be repaid, whether through sale, refinancing, or operational cash flow. 

Exploring alternative hotel finance options 

As banks tighten their criteria, alternative lenders are stepping in. Private funds and specialist hotel finance companies are offering more flexible solutions, faster execution, and a willingness to support complex projects. 

This is particularly valuable for conversions and refurbishments, such as turning commercial buildings into hotels. These projects often involve planning risks and regulatory hurdles that traditional lenders may avoid. Working with hotel finance brokers who understand these dynamics can make a real difference. 

Hotel refinancing and debt maturity challenges 

The UK hotel sector faces a significant challenge, with billions of pounds in loans set to mature in the coming years. With rising interest rates and stricter lending terms, refinancing is becoming more complex. 

Operators are exploring alternative solutions, including: 

• Bridging loans 
• Asset-backed finance 
• Joint ventures with capital partners 

These options can provide breathing room, but they require careful planning and expert advice. 

How Christie Finance supports hotel businesses

In today’s funding environment, working with an experienced hotel finance broker like Christie Finance can make all the difference. Here’s how we can help: 

• Access to a wide range of lenders 
  We work with banks, private funds, and specialist hotel finance companies, including those offering luxury hotel finance in the UK. This gives you access to funding options that may not be available directly. 
• Tailored solutions 
  We understand the hotel sector and structure deals that align with your operational needs. Whether you're refinancing, expanding, or converting assets, we’ll help you find the right fit. 
• Time and cost efficiency 
  Navigating lender requirements can be time-consuming. We streamline the process, saving you time and helping you secure better terms. 
• Strategic advice 
  Beyond securing finance, we offer insights on market trends, risk mitigation, and long-term planning. We’re here to support your business growth, not just your next loan. 

Get in touch with our broker today to explore tailored finance solutions for your hotel business:

Neil Collins 
Associate Director 
M:+44 7548 705 370 
E: neil.collins@christiefinance.com