The market for hotel properties remains steady in terms of supply and demand - despite negative press reports. Last year, hotel values rose 5.1%, well ahead of inflation, making the hotel sector the strongest of all the specialist property markets.

'In such a climate, and given that trading in general remains sound in almost all segments of the market, there is little incentive for operators to trade in their business for a lower-yielding, passive investment,' said Hughes. 'As a result, we are not seeing a glut of properties coming to the market and, fortunately, few distressed sales. Owners who are selling their businesses are finding that there is a strong demand for quality businesses which can demonstrate a robust trading performance.

He conceded that there had has been a significant drop in the number of overseas tourists visiting Britain, but pointed out that the effect of this fall has been largely confined to London and has affected the major hotel groups more than the independent operator because of their higher exposure to the American and the business markets. This has led to a two-tier market.