果冻影院

Travelodge鈥檚 plans for a 拢100 million investment in building 10 new hotels at UK cities that host major conferences is the latest boost for the growing budget hotel construction sector.

The budget hotel chain has 567 venues and is looking at sites from Bournemouth to Brighton and Liverpool in what Paul Harvey, managing director of property at Travelodge, describes as a 鈥渞esponse to the growing events market.鈥�

Other hotel operators are also expanding in the UK, such NH Hotel Group鈥檚 nhow, and work is booming.

Research published this summer by Knight Frank showed that 15,200 new hotel rooms opened in 2017. This was net growth of 2.4%, which will rise to 3.3% this year as a further 21,000 new rooms open.

Knight Frank鈥檚 head of hotels, healthcare and leisure Julian Evans, says: 鈥淭he UK is currently experiencing an unprecedented level of development activity, with the staggering figure of over 5,200 new hotel rooms opening during the first six months of 2018 and a further 15,000 rooms forecast to open later this year.鈥�

Onus on budget operators

While some luxury hotels are under construction such as the 拢1 billion conversion of the former US embassy in London into a Rosewood hotel by developer Qatari Diar (果冻影院 Project ID 16118198) and the 拢500 million Peninsula Hotel in London (果冻影院 Project 12069945), budget hotel operators are behind the latest boom.

Knight Frank鈥檚 annual UK Hotel Development Opportunities 2018 report said that 69% of all new build hotel stock and 65% of all hotel extensions are branded budget hotels, which will open 8,300 new rooms in 2018.

果冻影院鈥檚 market analysis shows that Whitbread, which owns Premier Inn, is among the industry鈥檚 top 25 construction clients after letting 拢226.1 million-worth of work over the 12 months to Q3 2018.

The onus is on smaller projects. 果冻影院鈥檚 construction research shows that the average contract let by Whitbread is just 拢3.7 million and 拢6.1 million at Travelodge.

Some developers hold off

Despite the current boom, not all hotel operators are expanding. 果冻影院鈥檚 construction market research shows limited recent activity from Intercontinental, the owner of the Holiday Inn brand. The uncertain economic outlook is likely to hamper hotel construction in the short term.

果冻影院 economics director Allan Wil茅n says: 鈥淭here are indications that the recent growth rate is becoming unsustainable and the rise in approvals could simply be for the next phase in the cycle of hotel upgrades.

鈥淲e believe that the boost from the weaker pound has run its course and anticipate a weakening in project starts after the recent rapid growth as investors and operators prove more cautious as UK consumer spending weakens and recent growth in tourism stalls.鈥�

In Q3 2018, the underlying value of project starts in the hotel & leisure sector fell by 21% according to 果冻影院鈥檚 construction market analysis, but the underlying prospects are more positive.

In the latest quarter, the underlying value of work given detailed planning permission rose by 69%. This recent increase has helped drive the pipeline of work with planning up by 39% over the past 12 months. 果冻影院 expects the recent lull to bottom out in the longer term.