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What's driving the hotel bonanza? The industry speaks

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New figures show the hotel market is blossoming and experts predict the sector is going to be one of the fastest growing areas of work forarchitects in 2014. The industry shares its thoughts on the reasons why

Colin Hobart, director of hotels and leisure at Aukett Fitzroy Robinson:
‘The boom is a result of a combination of overseas and domestic investors entering the market. It’s now not the banks buying hotels but private equity investors, as they have the available equity to commission the bigger projects.
‘Budget hotels have remained a constant pipeline due to their relatively low costs. The boutique and chain hotel market will always be less active since they cost more to build and there are limited site opportunities, especially in London. That being said, the high end market is picking up.’

James Dilley, associate director at Jestico + Whiles:
‘As far as London is concerned the demand for hotel rooms is insatiable, as is the drive to release more value from tourist attractions such as markets and to establish more restaurants.

Sites for new-build and conversions are rare and hotly contested

‘Sites for new-build and conversions are rare and hotly contested with competition often fuelled by those seeking a trophy, or by those for whom commercial reason does not apply.
‘There is a high demand for “budget” hotels that are long on design and short on service and also informal higher end lifestyle hotels, which include solid, destination restaurants, bars or clubs. The latter is attracting well established US independent operators.’

Stephen Hodder of Hodder + Partners:
‘Hotels have been a stable source of work during recession, particularly budget hotels. In the case of Manchester we’ve seen a remarkable growth in tourism, aside from the fact that there was an under provision in the City, and this has sustained the demand. Motel One is an interesting operator [see scheme the practice’s scheme for the company pictured]. Theirs is a refreshing, design-oriented offer and a departure from the budget model in the UK.’

Peter Cartwright of Cartwright Pickard:
‘There is evidence of an upturn in the regional hotel market. In the last year we have looked at schemes in Glasgow, York, Manchester and Leeds. Typically its the national three star hotel chains that we’re seeing interest from.
‘[However] At the moment none of our hotels are getting built primarily because the leases on them are not being signed by the hotel chains, which is preventing the funding being obtained. The chains are offering management agreements which are subject to income. As each chain has specific design requirements particular to them, there is little speculative development in this area.’

Ufi Ibrahim, chief executive of the British Hospitality Association:
‘The past decade has seen the worst recession in our country’s history, with little or no government incentive for the development of new hotels.  In spite of this, the hospitality and tourism sector has continued to grow with construction values - excluding land and professional fees - of more than £12billion.

In 2013 there were 32 new hotel openings in London alone

‘This continued new investment into the sector also creates jobs and in the past three years the hospitality sector has been the real engine of new job creation in the UK economy as a whole. 
‘Our industry has seen significant investment from the major players, including UK based hoteliers IHG and Premier Inn. In 2013 there were 32 new hotel openings in London alone, many in the premium space.  

‘While recovery is slower to take root in the regions, we are still encouraged by developments across the UK, notably in Scotland, Bournemouth and Cardiff. These areas have seen strong investment across the spectrum including new builds, existing hotels with room extensions, full refurbishments and rebrandings.’

Stephan C Reinke of Stephan Reinke Architects:
‘The increase in development of hotel schemes in London is being driven by a number of factors - more choice for the business traveller, a slightly improving economy and an increase in tourism. However, the redevelopment of previously dormant quarters of London, connected with new transport infrastructure is also key to the surge. Our practice is fortunate to be designing schemes at Holborn Viaduct, Ludgate Hill at St Paul’s and Clerkenwell Road at St John’s Square. Each for different client/operator, offering a superb urban design solution, crisp new architecture and a great hotelier offer.

‘Opportunities for hospitality destinations are continuing to surface at Tower Bridge, St Pancras and Whitechapel.’

Gareth Callen, director at Ryder Architecture:
‘Liverpool sees its first 5 star hotel opening next year. Additional projects using vacant office buildings are on site or at planning stages. The number of hotels and available rooms has doubled over recent years with no sign that saturation has yet been reached.’

Bryan Hamilton, director of hospitality at Aedas:
‘The global hotel market has grown in 2013 and is set to continue for 2014, with a growing demand for hotels as part of a greater mixed-use development.   

‘This concept isn’t limited to the international market and we’re seeing a trend for more city centre developments across the board, especially within budget brands which are gathering momentum.  Developers and operators are keeping a tight rein on costs but signs seem to be moving towards a more normal pace within the UK and even greater internationally where brands are either expanding or looking to update their current portfolio. Our interiors workload has significantly increased with a greater emphasis on renovation and this is expanding towards a growing area which includes serviced apartments, ranging from budget to luxury.

There’s a greater emphasis on renovation

‘Within London, we’re seeing signs that existing hotels will need to make significant refurbishments to keep up with the competition of newer and more modern hotels’.

Murray Levinson, partner at Squire and Partners:
‘We’ve seen a heavy weighting in our London workload towards residential development, as the value of homes currently outweighs any other commercial use, including hotels.  Most of our hotel projects are being developed as part of mixed-use project, where local authority policy has encouraged a retention of commercial uses on the site. 
‘A noticeable market shift is that high-end residential developments are now seeking to provide the level of fitout and service offered by high end hotels, often implemented by an established hotel operator, such as the Bulgari Residences or Hyatt at The Knightsbridge. 

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