Date: March 2018
How Often: Annual (2018 is the 3rd)
What: The 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.
Highlights: Edinburgh topped the Index, moving up four places in 2017 since the previous year with its high position is mainly attributed to strong occupancy levels and average daily rate (ADR) growth in 2017, resulting in a four-year upward revenue per available room (RevPAR) trend combined with constrained new supply.
Bath ranks second, moving ten places up, as a result of strong ADR performance, combined with a lower active pipeline.
Belfast is positioned third, improving its ranking by a significant 16 spots due to the city’s robust and positive four-year RevPAR trend together with relatively low land site prices.
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London has climbed back into the top 10, mainly because of the capital city’s recovery in ADR performance for 2017. The capital continues to be the largest market and in terms of RevPAR, it is still the top performing market.
Manchester has fallen out of the top 10, having experienced minimal RevPAR growth in 2017, as well as a relatively large development pipeline and increasing land costs.
Top 5 markets with highest ADR in 2017: London (£143 in 2016 vs £149 in 2017); Bath (£116 in 2016 vs £122 in 2017); Edinburgh (£94 in 2016 vs £103 in 2017); Oxford (£99 in 2016 vs £102 in 2017) and Cambridge (£92 in 2016 vs £95 in 2017).
Total number of rooms expected to enter the market over the next two years as a % of total existing room supply as at 31st December 2017: London (11,120 – 8.1%); Edinburgh (2,111 – 14.5%); Manchester (2,073 – 11.6%); Glasgow (1,525 – 14,4%); Belfast (1,352 – 33.9%) and Liverpool (1,170 – 14.3%).
Top 5 markets that have shown the most significant compound average annual growth in terms of RevPAR over the past four years: Belfast (12.6%); Hull (9.7%); Plymouth (8.4%); Sheffield (7.6%) and Edinburgh (7.5%).
Development/RevPAR Index – The top 5 markets with regards to hotel performance in relation to the costs of development: Belfast (4.38); Edinburgh (4.31); Bath (4.27); Cardiff (4.08) and Glasgow (4.08).