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Hotel demand could soar 71% after Heathrow or Gatwick expansion

06 May 2015 by
Hotel demand could soar 71% after Heathrow or Gatwick expansion

Demand for hotel rooms will rise by 71% and 42% respectively should the planned expansion of either Gatwick or Heathrow airports go ahead.

That's according to real estate advisors Savills, who also said that strong operational performance and increasing demand caused by rising passenger numbers at Gatwick and Heathrow (up by 7.5% and 1.4% respectively in 2014 compared with 2013), were already attracting new hotel concepts.

The research comes ahead of the expected report on the expansion plans by the Airports Commission, which has researched three potential options to help ease over-capacity at Heathrow.

These are: A second runway at Gatwick (requiring an extra 4,800 rooms); a third runway at Heathrow, or an extended north runway at Heathrow (both options requiring an extra 4,000 rooms).

Savills also suggested that new pod hotel concepts such as Yotel, and budget boutique operators such as Bloc Hotels, would be likely to capitalise on the airport market thanks to their suitability for short-stay guests, alongside traditional brands operators such as Hilton and Holiday Inn.

Airport hotels are particularly attractive to operators thanks to their high occupancy rates, despite lower average daily rates compared to city centre sites, it added.

Marie Hickey, commercial research director at Savills, said: "The historical link between airport passenger numbers and hotel demand means that, regardless of which option the Airports Commission chooses, it will generate demand for new supply. In turn, this will introduce new product types and brands providing greater convenience for travellers."

Bloc Hotels to open Japanese pod-style property in Birmingham >>

No-frills airports "too risky" for new hotels >>

Travelodge opens third Gatwick hotel >>

Trocadero ‘pod' hotel gets planning green light >>

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