Lendus.

Commercial Mortgages for Hotels & Hospitality Property

Hotel and hospitality finance requires lenders with deep sector knowledge. We connect buyers, operators, and investors with specialist lenders who understand RevPAR, occupancy economics, and the full hospitality spectrum.

200+ UK lenders
2-minute application
No credit check to apply
FCA-regulated brokers

Rates

5.0% – 8.5%

per annum

Term

5-20 years

Max LTV

Up to 65%

Amount

£250k – £25m

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Mortgage types available

Owner-Occupied

Rate
5.0% - 7.5%
Term
5-20 years
Max LTV
Up to 65%

Best for: Operators buying the hotel they run — lenders assess trading performance and sector experience alongside property fundamentals

Investment

Rate
5.5% - 8.5%
Term
5-20 years
Max LTV
Up to 60%

Best for: Investors acquiring hotels let to a management company or franchise operator under a lease or management agreement

Refinance

Rate
5.0% - 8.0%
Term
5-20 years
Max LTV
Up to 60%

Best for: Hotel owners restructuring existing debt, releasing equity for refurbishment, or consolidating borrowing across a portfolio

Key considerations

Eligibility requirements

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Market context

The UK hotel sector has substantially recovered from the pandemic period, with 2024 and 2025 showing strong RevPAR growth particularly in London, Edinburgh, and major UK city markets. The staycation trend has supported regional leisure hotels, while business travel demand has returned to major conference and corporate destinations. STR data shows UK average hotel occupancy running at approximately 75-80% in peak urban markets as of 2026. The budget and mid-scale hotel segments have seen significant new supply from branded operators, while independent boutique hotels in leisure destinations continue to command premium room rates. Hotel investment volumes have recovered, with private equity and family offices among the most active acquirers.

Frequently asked questions

How do lenders assess a hotel mortgage application differently from other commercial property?
Hotels are primarily assessed as trading businesses, not just property assets. Lenders focus on RevPAR, occupancy rate, average daily rate (ADR), and EBITDA in addition to the bricks-and-mortar valuation. Most specialist hotel lenders use a trading valuation methodology (income capitalisation or discounted cash flow) rather than a simple comparable-based approach.
Can I get a commercial mortgage to buy a hotel that is currently closed?
Closed hotels are significantly harder to finance on a standard commercial mortgage. Lenders require trading evidence, and a property with no recent performance data carries much higher risk. Bridging finance or development finance is more commonly used for closed or distressed hotel acquisitions, with refinance onto a commercial mortgage once the business is operational and trading.
Do I need a franchise agreement in place before applying?
No, but having an established brand agreement or management contract in place greatly strengthens a hotel mortgage application. Branded hotels have more predictable booking volumes through central reservation systems, and lenders understand the covenant offered by major hospitality brands. Unbranded independents need to demonstrate a strong direct booking channel and a compelling market position.
What is the typical loan term for a hotel commercial mortgage?
Hotel mortgages typically run for 5-20 years, with 10-15 years being common for established trading properties. Shorter terms of 3-5 years may be offered for higher-risk deals or where a significant refurbishment is planned. Some lenders will offer interest-only periods at the outset to allow a business to build cash flow following an acquisition or rebranding.
Can I use a commercial mortgage to fund a hotel refurbishment?
A commercial remortgage or equity release against an existing hotel property can be used to fund refurbishment. Alternatively, development finance or a staged facility may be available if works are significant. Lenders will want to see detailed project costs, planning permissions (if structural works are involved), and a clear plan for maintaining revenue during the refurbishment period.

Related property types

Pub Restaurant Premises Care Home

Guides and resources

What Is a Commercial Mortgage? Commercial Mortgage Rates Commercial Mortgage vs Bridging Best Commercial Mortgage Lenders

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