Branded hotels set to increase in UK

10 November 2015 by
Branded hotels set to increase in UK

Branded hotels are set to increase their footprint in the UK market, according to new research published today (10 November).

The Hotel Bulletin: Q3 2015, drawn up by AM:PM, HVS and AlixPartners, showed that 2,500 bedrooms of the 3,000 new rooms that opened during the third quarter of the year were branded. It said that while 37% of current UK bedrooms are independent, 84% of the active pipeline will be branded properties.

According to the report, the shift "reflects the preference of investors, developers and lenders for the relative safety of branded investments".

International brands, including those owned by AccorHotels, Hilton Worldwide and InterContinental Hotels Group , make up 46% of the active pipeline figure. While the national brand segment (27%) almost exclusively consists of the Premier Inn and Travelodge hotels.

"For the first time, budget bedrooms account for more than half of the total UK active pipeline. Over 1,500 bedrooms were added to the budget market pipeline in Q3 2015," the report said.

Whitbread added more than 500 bedrooms to their portfolio in Q3, bringing its total number of UK bedrooms to over 60,000. The report said the group remains on track to achieve its goal of 85,000 bedrooms by 2020. Travelodge opened three hotels (260 bedrooms) in the same period. The company currently has 37,500 rooms. Between them, Premier Inn and Travelodge have almost 100,000 bedrooms (25%) of around 400,000 branded bedrooms in the whole of the UK. This figure is set to increase once the current active pipeline is added.

The report also showed that nine of the 12 cities reviewed recorded revpar (revenue per available room) growth. However, the average growth of 3% was the lowest recorded since Q1 2013.
London's revpar increased by 6% in Q3 2015, which the report said was supported by the Rugby World Cup.

The top performer in this quarter was Cardiff with 17% revpar growth, while for the third consecutive quarter Aberdeen was the worst performer with a 22% decline in repar. The only other cities to record revpar decreases were Glasgow (10%) and Liverpool (3%), but the report said this was primarily due to the comparison with a strong quarter 12 months earlier.

Other cities considered in the report were Birmingham, Newcastle, Leeds, Manchester, Bath, Edinburgh, and Belfast.

Serviced apartments increasing foothold in UK >>

Bath shows strongest revpar growth >>

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