Edinburgh remains top destination for hotel development

Edinburgh has remained at the top the latest UK Hotels Market Index, with a strong active pipeline, attributed to strong occupancy and average daily room rate (ADR) levels in 2018 and “continuous strong market appetite”.

Colliers International’s UK Hotels Market Index is an analysis of 34 locations across the UK, ranked to determine the “hot spots” for hotel development and acquisition across the country. Belfast was found to be the second best for hotel development, moving up one place, predominantly as a result of “continued strong performance and low building costs”.

Liverpool improved its ranking by eight spots, coming in third. Colliers said this was mainly due to strong growth in both occupancy and ADR, resulting in the highest four-year RevPAR trend, combined with improved market appetite and relatively low land site prices.

The index also revealed Plymouth and Oxford have fallen out of the top 10. Oxford, despite recording strong RevPAR levels in 2018, was found to have increasing land costs which affected its ranking.

Plymouth fell out of the top 10 as it experienced a decline in RevPAR in 2018, which has largely been attributed to “strong growth” in Airbnb and alternative accommodation sectors as a result of a shortage of hotels.

Marc Finney, head of hotels and resorts consulting at Colliers International, said: “Overall the UK hotel sector is in rude health. Operating performance is holding up well in most UK markets and London continues to perform well.  

“The UK hotel market adds about 10,000 new rooms each year and this has increased in pace recently with almost 18,000 new rooms expected to open in 2019. This leaves hotels as a rare bright spot in a property market which is facing challenges in other sectors.”

Top Ten UK Hot Spots for Hotel Investment and Development:

Ranking City
1 Edinburgh
2 Belfast
3 Liverpool
4 Chester
4 Bath
6 London
7 Glasgow
8 Brighton
9 Cambridge
10 Leeds

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