Regional cities top hotel market ranking, says Colliers
Its annual Hotel Market Index in 2022 placed Edinburgh, Belfast and Bath as the top three performing markets
A strong hotel market performance last year has pushed regional markets to the top of Colliers’ 2023 UK Hotel Market Index.
Its annual Hotel Market Index in 2022 placed Edinburgh, Belfast and Bath as the top three performing markets.
The index analysed the performance of 38 UK cities across ten performance indicators including occupancy figures, average daily room rates, RevPAR growth, development costs, land prices and market appetite.
In recent years, leisure markets are said to have been “leading the pack” as the hotel industry recovers from pandemic closures and tiered re-openings.
According to Colliers, the top 10 markets are:
- Edinburgh
- Belfast
- Bath
- York
- London
- Inverness
- Oxford
- Glasgow
- Cardiff
- Swansea
Marc Finney, head of Colliers Hotels and Resorts Consulting, said: “Regional cities are continuing to perform well in our analysis thanks to the mix of continued demand from tourists, domestic and now international as well, on top of their more affordable land prices – which is crucial at the moment while the cost of construction and borrowing has risen.
“For investors it’s essential that there is a good balance of business and leisure demand to be able to support the development costs of hotels, and we’re seeing a strong pipeline in markets where there is an under supply of stock.”
He added: “All of our top ten cities saw their average daily rates in 2022 exceeding 2019 levels, with Belfast recording growth of 28%, closely followed by Bath and Edinburgh.
“Despite the worries of the cost-of-living crisis, recent hotel performance data shows that people will prioritise their leisure time, even if it’s just for a short break away as being in a different environment for a few days is now deemed an essential for long-term mental health and wellbeing.”
Siddhika Shah, associate director in the Colliers Hotels and Resorts Consulting department, who analysed the data, said: “Consumer demand for hotels has remained elevated since the pandemic re-openings, which has helped to ensure that RevPAR performance in 2022 exceeded 2019 levels in 35 out of the 38 markets that we have considered. All 38 markets also recorded ADR figures above pre-pandemic levels during 2022.
“Bath recorded the highest growth in RevPAR during 2022 thanks to its strong ADR performance, followed by other leisure markets such as Belfast and Eastbourne. Glasgow and Plymouth were amongst some of the highest climbers in our overall ranking. Whilst Plymouth has benefitted in recent years from the Staycation boom, Glasgow has become a more desirable market thanks in part to hosting the COP26 conference during 2021, as well as becoming a popular city for offices of major corporations.”
