The research includes the Knight Frank UK Hotel Development Index, which identifies the UK cities which present the best prospects for hotel investment and development. Themes that have come out of this year’s publication include a focus on lifestyle hotels, serviced apartments as well as mixed-use hotel schemes and the role which hotels have in reshaping our changing city centres.

Key Takeaways: 

  • The UK saw some 15,500 new hotel rooms opening in 2018, constituting a 2.4% growth in the UK hotel supply. The intensity and depth of the UK hotel pipeline has continued into 2019 with around 19,300 new rooms expected to open by the year end, equating to annual supply growth of 2.9%.  
  • Confidence in the sector remains strong, driven by a resilient trading performance. Combined with a greater understanding of the fundamentals of the UK hotel sector and scarcity of assets for sale, these compelling reasons have helped fuel strong interest in hotel development.
  • Some 35,000 rooms are currently under construction in the UK, expected to open by 2023. London accounts for 38% of the 2019 development pipeline, equating to some 4,000 new rooms. Hotel supply in London is forecast to rise by 4.2% for the full year 2019 and by 4.5% in 2020.
  • Whilst the budget sector is expected to rise by a further 7,500 rooms in 2019, representing annual growth of 5%, its share of new hotel openings is steadily declining and set to fall to 39% of total new supply. Meanwhile, largely attributed to the growth in Lifestyle Hotels, both the four-star and three-star sectors, will witness strong growth.
  • The Knight Frank UK Hotel Development Index illustrates that there are compelling reasons for investors to seek viable development and investment opportunities, with Edinburgh, London, Brighton, York and Birmingham ranked as the UK’s top 5 most attractive cities for hotel development.