HOTEL & LEISURE Growth of the Budget Hotel Sector (number of rooms) – 1995-2014
THE BUDGET HOTEL SECTOR The UK budget hotel sector has developed rapidly since the first branded budget hotel was opened by Travelodge in 1985. It is now the most active development sector in the UK hotel industry, representing around 20% of the total number of hotel rooms.
The budget sector is dominated by the two leading players, which have traditionally used land adjacent to restaurants, motorways services and public houses to rapidly roll out of their portfolios. However, in recent years, as the budget sector has matured, there has been a move into town and city centre locations and an increase in average hotel size.
Capital Expenditure in the UK Leisure Market – Share by Sector 2013
Going forward, the overall trend is for growth and this will be most evident in London and city centre locations, where there is a shortage of quality budget hotel rooms and demand remains strong. It is estimated that the budget hotel sector will grow by around 4-5% per annum until 2020.
Contractors Output Entertainment and Leisure Work (public and private sectors) – 2008-2016 (£bn)
HOTEL CONSTRUCTION The UK has seen a sustained period of growth in its hotel accommodation stock. However, after years of being constrained by capital budgets, hotels have now refocused portfolio investment through refits and refurbishment programmes to maximize occupancy levels, rather than through adding new build properties – though the exception has been budget hotels where value chains continue to expand their portfolios through new development.
Extracted from ‘Construction in the Hotel, Leisure and Entertainment Report – UK 2014-2018 Analysis’
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In the last few years, there has been a shift from independent unbranded hotels to branded hotels as investors continue to look for returns and investments that will hold their value. This has created a surge in re-branding and presented opportunities for hotel construction and refurbishment contractors. Demand for new flooring has grown consistently in this period, with specifiers and hotel owners open to a mix of materials. While the sector has always been strong for carpets, floor tiles have become increasingly popular, with wood flooring also specified in larger public areas, such as bars and restaurants.
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