New UK Hotels Market Index Launched by Colliers

Posted on 30 March, 2016 by Chris Grigorovsky

The Hotel team of Colliers International has now launched its inaugural UK Hotels Market Index, which has analysed 36 locations across the UK in order to find out the ‘hot spots’ for development and acquisition.

Hotel in Cardiff Bay

Hotel in Cardiff Bay

There are nine KPIs being used in the report, including land value, construction costs and occupancy rates. Each of the 36 locations are being scored from one to five, with five being the highest. Consolidated into a single figure, the scores are then ranked based on whether or not it’s a desirable location for investors.

Commenting on the new index, Marc Finney, Head of Hotels & Resorts Consulting at Colliers International, said: “High land prices in London are causing investors to look outside of the Capital for opportunities to spend their cash. As such, we are increasingly being asked by our hotel investor and operator clients which UK regional cities offer the best development opportunities.

“Together with our regional experts, who know the local UK markets exceptionally well, our Hotel Market Index gives us something more than anecdotal evidence through which to advise our clients.

“With the Index we are able to couple our on the ground expertise with a more scientific formula to demonstrate the key performance indicators which should be influencing an investor’s decision making process and rank the opportunities according to their own investment criteria.”

The top 10 hotspots are as follows:

1. Cardiff
2. Manchester
3. Leeds
4. Chester
5. Liverpool
6. York
7. London
8. Edinburgh
9. Brighton
10. Bath

Cardiff came top due to its low active pipeline, low build costs and strong hotel performance of the last three years.

Manchester ended up second due to good investment and valuation parameters, as well as substantial hotel performance. It’s known as a popular city for the business and leisure trades.

The Northern Powerhouse is currently in a strong position for future hotel development as out of the top six locations; Leeds, Manchester, York, Chester and Liverpool are within this area.

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