Hotel sector set to take off thanks to business and tourism
Hotel markets in the UK’s key regional cities are set to take off as increasing supply and new mixed-use developments tempt businesses and tourists alike.
Research by JLL examining key trends in Leeds, Manchester, Edinburgh and Birmingham are expected to see a combined 4,886 new rooms open over the next couple of years.
Birmingham and Manchester are the best-performing markers based on RevPAR growth.
RevPAR refers to ‘revenue per available room’ and is calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.
“As corporates expand their HQ reach beyond London and the UK becomes a more affordable and accessible place to visit for overseas tourists from China and the US, we are seeing strong growth in the hospitality sectors across the UK regions,” said Kerr Young, director in JLL’s Hotels & Hospitality Group.
“We are also seeing that councils such as Manchester’s are adopting a proactive approach to new hotel development as business and tourism grows.
“London has long been a focus for hotel investment, but now regional market is witnessing the benefit of interest from overseas investors following the weakening of the pound.
“Despite initial uncertainly in the immediate aftermath of the recently EU referendum there is a positive story around the UK in terms of macroeconomic stability and transparent transactional environment.”
In Manchester 1,920 rooms are expected to enter the market by 2018, driven by improved infrastructure and capital investment across the cities.
INNSIDE By Melia Manchester, Motel One, Hotel Gotham, King Street Townhouse and Hotel Football all opened last year while The Lowry underwent a multimillion-pound tranformation and Hilton Hotels, EasyJet, Travelodge and the Topland Group have announced plans for 2017.
Hotels also form a key part of Allied London's £1 billion St John's masterplan and Gary Neville’s and Ryan Giggs’ St Michael's development.
Despite the glut of openings, Manchester enjoyed record occupancy rates as the city’s visitor economy continues to go from strength to strength on the back of the popularity of Manchester City and Manchester United.
Birmingham, Leeds and Edinburgh have all seen increased occupancy rates over the past year.
Initiatives such as the ‘Edinburgh 12’, a plan to progress 12 mixed use sites across the city by 2020, Manchester’s Airport City development and Hammerson’s new £165 million Victoria Gate retail development in Leeds are all driving the attraction of these cities.