The British hotel industry is set for a record 2017 due to a substantial increase in both domestic and international visitors planning their holidays in the UK. According to Barclays, 63% of international tourists are more interested in holidaying in the UK compared to last year, with 31% of those being interviewed pointing to the weaker pound as an attractive reason. In 2017, despite more challenging economic conditions, a 2.3% RevPAR is expected. An increase in “Staycations” for domestic travel, attempts by the UK to boost tourism to the regions and the attraction of a weak pound to international leisure travellers will boost some cities. A forecast for occupancy rates are expected to hit a record 77% and remain there in 2017. In 2017 the price of a room in a regional hotel could reach £70 daily.
Knight Frank’s recent research, headed “UK Hotel Development Opportunities 2017”, states that 16,000 new rooms opened in 2016; that represents a 2.7% growth in total hotel supply and a 20% increase in the volume of new hotel rooms opening year-on-year. This growth is driven by the budget hotel sector, which totalled 8,000 new rooms opened in 2016. The budget hotel sector now accounts for 25% of the UK’s total supply and will likely continue to drive growth, with 11,600 rooms due to open this year. Knight Frank has also launched its inaugural Knight Frank UK Hotel Development Index which identifies the UK cities considered to present the best prospects for hotel investment and development. Bath, Brighton, Edinburgh, Cambridge and Belfast are ranked as the UK’s top five most attractive cities for hotel development for 2017.