The latest Jones Lang LaSalle Hotel Investment Highlights report shows hotel development constricting, with the supply of new bedrooms increasing by only 5.6% of existing stock between 2012-2014. Prior to the downturn and the steep supply of new bedrooms delivered between 2006 and 2008, the changing economic fundamentals following this period have meant activity in hotel investment in Europe has weakened slightly in the first 6 months of 2012 to €3.7 billion when compared to the same period in 2011, is a decrease of 12%.
So what is on store for UK Hotel Development? Chris Moore, National Director Jones Lang LaSalle Hotels commented: “Despite the odds facing the hotel market at the moment, development is still taking place, and more often in unexpected places. Very often, the justification for hotel investment lies in the marriage which occurs when a hotel proposition is blended with other activities and it is the diversity of those activities which are spawning new reasons for building hotel bedrooms.”
In the last year, Jones Lang LaSalle Hotels advised on a number of proposed hotels designed to be run alongside major visitor attractions, such as St George’s Park at Burton, the new educational hub for English football which represents a ground-breaking development of this nature.
Moore said: “Evidence reveals that the ability of a key stakeholder to underwrite a minimum room night guarantee is an innovative route to secure stronger commitments from operators, funders and investors. Adopting those same principles, the University of Manchester and Bruntwood are developing a new 210 bedroom 4-star hotel as a part of the expanding Manchester Business School. Here, a long term room night guarantee has been created to enable the partners to deliver a better quality hotel which will add considerable value to the wider scheme.”
Moore concluded: “The relationship between hotels and the places we like to spend time is evolving and the association is such that partners working together are designing ever more effective and innovative ways of funding, sharing risk and preserving spend that might otherwise be lost outside the boundaries of their estate. When looking closely at the UK hotel development pipeline, improved technology will encourage closer co-operation between hotel owner and brand as cross-billing between different points of sale on diverse sites becomes smoother and more sophisticated. Successful partnerships will allow hotel concepts to be rolled out on both a domestic and global stage and as a result, by combining a hotel with key visitor attractions can bring to life to a facility and infrastructure, turning an attraction into a 24/7 venue.”