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Third runway will create demand for 3,500 new hotel rooms

The creation of a third runway at Heathrow Airport see demand for hotel rooms soar by 42% equating to an additional 3,500 bedrooms, according to estate agent Savills.

The firm also said that the 10-year average occupancy for airport hotels of around 78% to 79% has made the locations particularly attractive to operators despite average daily rates being lower than their city counterparts.

Even without the extra runway, “robust” operational performances and increased demand is already attracting new hotel brands and concepts to airport locations, explains Savills.

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The forecast comes after the Airports Commission back a third runway at Heathrow earlier this month, claiming it would generate up to £147bn in economic growth over 60 years and create 70,000 new jobs by 2050.

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Savills said that mid-market branded operators, such as Hilton and Holiday Inn, have dominated the market, but new pod hotel concepts such as Yotel and budget boutique operators such as Bloc Hotels.

James Bradley, associate director of hotels at Savills, comments: “These products are well suited to the short stay airport hotel guest and we expect to see this type of brand expand around Heathrow now the third runway has been confirmed.”

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