• UK hotels,
The development pipeline for the likes of Travelodge and Premier Inn is testament to the UK’S burgeoning hotel sector, writes catherine chetwynd
despite the uncertainty caused by the political and economic environment, there is still a substantial development pipeline in the UK, especially in the major cities.
“Whereas recent years have seen branded budget hotels lead the charge, there is now a greater pipeline of full service and boutique properties. And although the sector is becoming more branded, some interesting smaller boutique hotels are being established as well,” says consultant to the hotel industry Melvin Gold.
Edinburgh, London, Brighton, York and Birmingham are the top five most attractive cities in Knight Frank’s UK Hotel Development Index 2019, a major factor in the 2.9% expansion in supply forecast for 2019, with some 19,300 rooms opening. Of these, 34% were slated for the capital.
Edinburgh secured the top ranking position in the report. Despite significant hotel supply coming on stream in Edinburgh during 2018 and 2019, and with a continued strong pipeline of properties, the city outperformed the index, profiting from growth in its total occupied room nights and rooms revenue, and benefiting from strong economic and tourism fundamentals. However, it is important to factor in the volume of pipeline that continues to enter the market, as this is likely to result in a short-term downturn in trading performance while it is absorbed.
Budget hotels in particular set up shop in small towns and cities, as well as several establishments in larger urban areas.
Premier Inn leads the way, providing 20% of supply during the first seven months of 2019. Travelodge follows with 9%.
Whitbread-owned Premier Inn now counts over 800 hotels in its UK portfolio, and is gearing up to open another 37 in 2020, onethird of which will be in seaside towns and cities. The group has also diversified by adding Premier Plus rooms at around 20 city centre hotels and a number of standalone super-budget ZIP hotels and tech-focused hub by Premier Inn hotels.
Meanwhile, Travelodge opened 17 hotels in the UK, including the seventh Travelodge Plus, the group’s ‘budget chic’ hotels with new look standard rooms; Superrooms, with Lavazza coffee machines, irons and ironing boards, USB power outlets and a more comfortable desk and chair – mini-chiller cabinets follow; and redesigned restaurants. Superrooms feature in more than 50 UK hotels. Travelodge started a modernisation programme more than five years ago and has invested more than £150million in improved quality and greater choice.
Meanwhile, brands such as Moxy, Hampton by Hilton and Holiday Inn Express have also enjoyed respectable growth, each adding between 500 and 620 new rooms in 2018, the Knight Frank report states.
New faces
“Although economic and political uncertainty slowed the transaction flow, it has created opportunities for inward investors, including new brands,” says Gold.
There are a number of examples. Having acquired The Randolph in Oxford, Graduate Hotels will enter the market, and in the same deal, investor Adventurous Journeys (AJ) Capital Partners bought Rusacks in St. Andrews from Macdonald Hotels.
And Hong Kong and Canadian investor Great Century recently acquired the Fairmont
Hotel St. Andrews. “The transaction market is quieter but still active,” says Gold.
Bespoke Hotels is adding three properties to its portfolio. It took over management of Dalmunzie Castle in Glenshee, Scotland, and Hotel Brooklyn opens in Manchester in February with 189 rooms; it plans to be ‘Manchester’s most accessible hotel’.
The third property is The Telegraph Hotel, occupying the former Coventry Evening Telegraph building after a £20million refit with 88 bedrooms, a 160-seat meeting room, restaurant and three bars, and bursting on to the scene in 2021.
In Scotland, the Malmaison Edinburgh City launched in December, with the group's growth plans including properties in Manchester, York and Bournemouth.
The purchase of a site at West George Street, Glasgow, signals the arrival of BLOC Hotels in the city, and a £120million redevelopment will produce a seven-storey smart hotel and retail space. The planned 25-storey BLOC Grand Central in Birmingham is on the site of a vacant office block; and the company is launching apart-rooms for longer stays at its existing property in Birmingham’s Jewellery Quarter.
The group is also planning to expand its hotel at Gatwick Airport South Terminal, adding 231 rooms to the existing 245 for 2021. Other BLOC properties are destined for London, Brighton, Birmingham, Bristol, Manchester and Edinburgh.
Outside the UK, plans for growth embrace five cities and the appointment of Dominic Mayes as Property Director flags the company’s expansive intent.
Owned or franchised properties make up the easyhotels development pipeline. On the list are Chester, Cardiff, Oxford, Blackpool, Cambridge, Derby and Bristol, the latter subject to planning consent. The self-styled ‘super budget’ group also plans to open
Premier Inn now counts over 800 hotels in its UK portfolio, and is gearing up to open another 37 in 2020”