Hotel expansion is buoyant, says new BHA report

05 November 2010 by
Hotel expansion is buoyant, says new BHA report

Despite the recession, the UK hotel industry is continuing to expand, with more than 10,400 rooms opening this year, according to the newly published annual report from the British Hospitality Association (BHA).

British Hospitality: Trends and Developments 2010 reports that just over half (55%) of the new-builds are in the budget sector, with new brands such as Citizen M, H10 and Tunes opening their first properties in the UK. The budget sector has more than doubled since 2001, when there were 50,000 rooms, to 112,600 today.

However, while new hotels have continued to open apace, this year has seen up to 70 projects abandoned or put back to an indefinite date in the future.

"Undoubtedly, the recession has curtailed bank funding and sent some developers into insolvency," the report says.

While the majority of new hotel openings have been branded properties, the report highlights some of the exceptions, such as the Cornwall in St Austell and the Oxfordshire in Thame.

On insolvencies, the publication believes that the 2,429 in the hospitality industry in 2009 has reached a peak. "Although the figures for 2008 and 2009 showed a significant increase on 2007, in the context of the industry's 200,000 establishments, it's clear that it has survived in better shape than many thought possible," it says. "Of all the sectors, hotels suffered the least."

While the number of hotels fell slightly in 2009, the number of restaurants increased. However, the total number of meals served declined from 5 billion to 4.8 billion, while food and drink sales increased by just under £1b.

Meal offers are continuing to have a major impact. "There are still plenty of straight two-for-one and money-off offers, especially in the pizza restaurant sector, where the UK's largest restaurant brand, Pizza Express, has led the pack," says consultant Peter Backman.

"But many offers are now being more targeted - for instance, at particular times of the day or week when business is traditionally slack."

BHA chief executive Ufi Ibrahim said the industry had successfully survived the recession without incurring the widespread damage that was predicted at the outset.

"The publication underpins the importance of our industry to the UK economy and provides a valuable source of intelligence and data on which sound policy decisions - both commercial and public - can be made," she added.

British Hospitality: Trends and Development 2010, is sponsored by American Express and costs £250 (free for members). An online version is available for £175. Contact 020 7404 7744 for details.

Hospitality industry more resilient than expected says BHA report >>

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By Janet Harmer

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