New UK hotel supply in 2016 passes 10,000 bedrooms

The number of new hotel rooms opening in the UK in 2016 is on track to reach its highest level since 2012, according to AM:PM. Research by the hotel data and market intelligence firm found that year-to-date new supply has passed 10,000 bedrooms. Alan Gordon, director of AM:PM, said: “New supply in the UK hotel sector has been building steadily since the inevitable lull of 2013, which followed the near 40-year peak in 2012. "Passing the 10,000 new bedroom mark in 2016 is a significant milestone, which keeps the sector on track to exceed the total of 13,500 new bedrooms opened last year.” The research showed there is a strong pipeline of further new openings scheduled for Q4, especially in London where several large hotels are due to open. These include the 313-bed Novotel London Canary Wharf, 494-bed Park Plaza London Waterloo and 168-key Locke Aparthotel in Aldgate. Outside the capital, the South West is due to welcome new hotels in Bristol and Cheltenham by the end of the year, and in Scotland, new hotel openings with more than 100 bedrooms are due in Aberdeen, Dundee and Edinburgh. Gordon added: “New supply for the year to date currently amounts to just over 10,250 bedrooms, around a third of which has been in London, which is set to add over 4% to supply this year. In the regional UK market, where supply is set to rise by 2% in 2016, we’ve continued to witness the strongest appetite from hotel brands, developers and operators in the major cities with Birmingham, Manchester, Edinburgh and Glasgow adding over 1,800 bedrooms so far this year. “Budget hotels, led by Premier Inn and Travelodge, have continued to account for well over 50% of new supply in 2016, with 24% of new bedrooms being added by the 4-star segment. Interestingly, aparthotels and serviced apartment have now become the next strongest growth area, accounting for around 10% of total new supply this year, led by operators including Staycity, SACO and Skyline.” Gordon said new hotel developments remain the "core driver" of supply growth, with new build projects accounting for 49% of the total and conversion of buildings into hotel use representing a further 28%. However, property extensions to add extra bedrooms to an established hotel have become increasingly popular and currently account for 23% of new bedroom supply in the UK, he added. “As always, it’s important to consider net supply change after factoring hotel closures. In the first nine months of 2016, hotel closures have resulted in almost 2,800 bedrooms being taken out of supply. We current expect the full year loss from closures will be lower than the 4,200 bedrooms in 2015.”