Real estate adviser Savills has predicted that investment levels in the market will reach £5.1bn for the full year, up 28% on total 2016 volumes of £4bn.
London remains the largest market, accounting for 55% of transactions by value (£1.1bn).
Martin Rogers, head of UK hotel transactions at Savills, said: “The UK hotel market has had a strong start to the year as the sector remains resilient to the headwinds of the last six months.
“The favourable exchange rate has attracted overseas buyers that are looking for stable, long-term income.
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“The anticipation of a softer Brexit will provide further comfort, encouraging development and relieving pressure on staffing."
Individual sales accounted for 92% of transactions by value (£1.83bn), however, Savills expects a number of high-profile portfolios to come to the market in H2 2017.
Overseas investors accounted for £1.2bn of transactions in the first half of the year, compared with the £822m transacted by domestic investors.
Notable investments in the first six months of the year included the sales of the South Place Hotel in London and the Holiday Inn in Manchester city centre and the ongoing sales by Lone Star from its Project Solstice portfolio.