PROPERTY investors are always looking for ways to expand their portfolios. Hotel-to-let has proved a popular option in the past couple of years and, as Kerry Ann Eustice finds out, it's been a good move for many.

Investors who have put cash into the GuestInvest scheme - a hotel-to-let scheme - are celebrating the strength of the hotel market this month.

The European Hotel Revenue Survey released earlier this month found London has worked its way up the top European market in terms of revenue per available room (RevPAR) and now occupies the top spot.

According to data sourced by professional services firm KPMG and global benchmarking provider The Bench London achieved a RevPAR of 166.63 euros, which is a rise of 18.49 per cent since last year.

GuestInvest, the company which brought the buy-to-let hotel concept to the UK, is keen to highlight the success the market has been achieving and therefore the returns and gains its investors have enjoyed.

To promote the strength of the hotel-to-let model, the company is holding a number events next month to attract more investors to the scheme.

London-based talks are planned for Sunday 4 and Monday 5. Company founder Johnny Sandelson will be speaking and experts such as financial advisors and a SIPPs providers will be on hand to offer advice on specific aspects such as tax and legal issues. Current room owners are also due to attend the event, to offer investor-to-investor advice.

The success of renting out hotel rooms - last year's average returns at Guesthouse West were 6.9 per cent, average occupancy levels were 87 per cent and investors who sold rooms netted an average capital growth of 15 per cent - means opportunities to purchase a lease are rare. Guesthouse West in Notting Hill, for example, sold out within weeks.

To meet this demand, there are plans to convert the former Whitbread Brewery - one of London's oldest City Grade II listed sites - into another hotel and Nest, a site in Bayswater, is due to open at the end of this year. Some 50 per cent of Nest's suites have already been sold off-plan.

GuestInvest founder Johnny Sandelson is unsurprised by the hotel market's buoyancy. He said: "With London hotels experiencing a rise across revenue, room costs and occupancy rates, it is set to be an exciting period for our investors as we continue to grow."

Investors who were smart enough to place funds into the scheme before the rising hotel figures were released are also pleased.

James Dubois, a chartered accountant from Epsom, added room 15 at Guesthouse West to an existing portfolio of buy-to-let properties.

He purchased his room when the hotel launched in April 2004 for £235,000.

James said: "What I love about this investment is it is fully managed, so there is no annoyance or any of the aggravation I experience with my other properties. There are also no long void periods while looking for a new tenant, as rental accrues on a daily basis."

Since purchasing his hotel room, James has made an average return of approximately 6.7 per cent a year and has also taken advantage of the 52 nights a year leaseholders can become guests themselves.

Mike Greene, CEO of marketing research company HIM, has already bought off-plan at Nest as part of his SIPP.

Previously a property developer, Mike decided to invest in a hotel room to avoid any maintenance hassles and because he felt the tax benefits spoke for themselves.

Mike said: "Since the Chancellor ruled out private property as a suitable investment for retirement, Nest is an attractive option for those looking to invest as part of a SIPP.

"As it's part of my SIPP I won't be able to stay in my room for free, but my patronage and that of my clients drives return on my investment."