Edinburgh is still the number one destination for hotel development, with strong performance, a robust upward RevPAR trend and continuous market appetite fueling the tourism growth in the city.
This is according to global real estate advisor, Colliers International, as it launches its fourth UK Hotels Market Index (UKHMI).
The Index, which analyses 34 locations across the UK to find ‘hot spots’ for development and acquisition, found that Belfast was the second most attractive market, as a result of continued strong performance and low building costs.
Liverpool is positioned third, improving its ranking by eight spots, due to strong growth in both occupancy and ADR, resulting in the highest four-year RevPAR trend, combined with improved market appetite and relatively low land site prices.
Remarkably, Plymouth and Oxford have fallen out of the top 10.
Oxford, despite recording strong RevPAR levels in 2018, has increasing land costs which affects its ranking.
Plymouth, on the other hand, experienced a decline in RevPAR in 2018, which has largely been attributed to strong growth in Airbnb and alternative accommodation sectors as a result of a shortage of hotels.
Marc Finney, head of Hotels & Resorts Consulting at Colliers International commented: “Overall the UK hotel sector is in rude health. Operating performance is holding up well in most UK markets and London continues to perform well. The UK hotel market adds about 10,000 new rooms each year and this has increased in pace recently with almost 18,000 new rooms expected to open in 2019. This leaves hotels as a rare bright spot in a property market which is facing challenges in other sectors.”
London remains the UK’s top performing market in terms of RevPAR, and has moved up a further two places, mainly due to the capital city’s continuous growth in both occupancy and RevPAR.