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The hotel construction sector is preparing for an increase in activity with £2.5bn-worth of projects in the development pipeline, according to Glenigan’s construction industry intelligence.
It revealed the hotel construction sector had been “hit hard” by the pandemic, with a 32% fall in project starts in 2020 and a further fall of 2% last year, however prospects are improving.
The study covering the two years to March 2022 found 352 approved hotel construction projects across the UK.
London has the strongest pipeline of work in comparison to any other European city. The pipeline of hotel projects in London to be approved since 2020 is worth £740m.
The capital also has larger hotel developments than the rest of the UK. The value of the average hotel project in the pipeline in London is £12.3m compared to a national median figure of £7.2m.
According to the report, two major schemes from the capital’s pipeline are already moving forward with tenders being returned for a £40.7m hotel in West Drayton and construction of a £20m Hampton by Hilton hotel near Heathrow.
Additionally, large hotel projects are moving out of the pipeline in the regions; including the £35m Heart of the City II in Sheffield and the £76m Wellington Hotel in London.
The study also found larger than average hotel projects are being planned in Scotland, where the average scheme in the pipeline is valued at £11.9m.
The forecast predicts a rise of 25% in hotel and leisure construction projects starting this year followed by an increase of 17% next year.
