HOTEL & LEISURE
FOCUS ON: CONSTRUCTION IN THE HOTEL SECTOR
Capital expenditure in the hotel sector continues to have a strong share in the leisure market. Here, AMA Research presents the future prospects for the industry.
HOTEL SECTOR OVERVIEW There are approximately 13,000 hotels in the UK, of which some 1,600 are in the branded budget sector. The overall hotel supply decreased by around 2% between 2011 and 2014, driven by the closure of mid-market branded and independent hotels. However,
FUTURE PROSPECTS Medium to long-term prospects for the hotel industry are positive, with turnover in the sector forecast to grow by an annual average of around 4% until 2018. However, despite these optimistic forecasts, the hotel industry will remain under pressure with consumer
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the number of branded budget hotels increased by around 4%.
The sector is now worth an estimated £14.7bn. Investment continues with the main focus on growth areas such as budget, boutique and themed hotels.
The hotel sector has remained relatively healthy during the recent
spending likely to remain squeezed and independent hotels still finding it difficult to secure finance for refurbishment projects and new hotel openings.
The challenge for hotels is to consider investing in refurbishment in the face of continued high levels of new supply. There is still considerable
downturn, particularly in London, in both the 5-star/luxury and budget sectors. The regional hotel sector has been boosted by improving economic conditions and strong demand, providing confidence across the sector and renewed optimism in the construction/refurbishment market.
underinvestment in the sector and there is intense competition in the budget sector, in particular. However, overall, the UK hotel industry is continuing to expand, with an active pipeline of around 30,000 rooms planned for 2014-16, of which around half are in the budget hotel sector.
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