_Knight Frank launches UK Hotel Development Opportunities 2018 Report

A must read for hotel owners, developers and investors, included within the report we present our findings of The Knight Frank UK Hotel Development Index, which identifies the UK cities which present the best prospects for hotel investment and development.

The New Road Hotel, Whitechapel, London (opened April 2018) 

Key takeaways: 

• The UK saw some 15,200 new hotel rooms opening in 2017, constituting a 2.4% growth in the UK hotel supply, with the intensity and depth of the UK hotel pipeline continuing into 2018 with over 20,000 new rooms forecast to open by the year end. 

• Driving the growth in the UK’s hotel supply during 2017, was the continuing dominance of the branded budget hotel sector, accounting for 63% of total new UK hotel supply.

Whilst the budget sector is expected to rise by a further 8,000 rooms in 2018, representing annual growth of 5%, its share of new developments is set to fall to 39%, whilst the four-star sector and serviced apartment sector are expected to witness unprecedented levels of growth.   

•  As hotel real estate has cemented its position as a mainstream asset class, the pool of investors and lenders seizing the opportunity to fund hotel development schemes across the UK has widened significantly.

With the pre-construction development pipeline growing progressively over the past few years, our report takes a look at the alternative funding routes available for development including forward funding and forward purchase agreements.

• The Knight Frank UK Hotel Development Index illustrates that there are compelling reasons for investors to seek viable development and investment opportunities in UK regional markets, with Inverness, Brighton, Edinburgh, Cardiff and Liverpool ranked as the UK’s top 5 most attractive cities for hotel development.