Hotel construction set to boom with £2.5b development pipeline

The hotel construction sector is preparing for a bumper period of activity with £2.5b worth of projects in the pipeline, Glenigan's construction industry intelligence has announced.

It comes as the sector emerges from the pandemic, which had caused a 32% fall in project starts in 2020.

London is set to see the highest number of new hotel sites, with 60 projects in the pipeline approved since 2020, worth £740m.

Compared to the national median figure of £7.2m, the average hotel project in the pipeline in London is worth £12.3m, with some sites exceeding these figures significantly, such as the £20m Hampton by Hilton hotel near Heathrow.

The capital has also topped the charts of the Europe Hotel Construction Pipeline Trend Report, which ranks the pipelines of all European cities.

Glenigan's report also showed that some larger than average hotel projects are taking place in Scotland, such as the £100m Met Tower Hotel in Glasgow and the £38.5m fit-out of the W Hotel in Edinburgh, totalling at a £395m valuation for the region.

By contrast, the East Midlands and Northern Ireland have the lowest-value of projects in the pipeline, with £37m and £19m respectively.

The most recent Glenigan Construction Industry Forecast predicted a 25% increase in hotel and leisure construction project starting this year.