Hotel and leisure construction will see a 14% rise in 2024 after a significant slump of 23% last year, according to a new report by Glenigan, a provider of construction project sales leads, industry data, analysis, forecasting and company intelligence.
The report stated that growth will moderate in 2025 but continue, albeit at a slightly lower rate of 6% next year and 7% in 2026.
A 12% rise in the underlying value of projects securing detailed planning permission in 2023 will fuel this rise. Glenigan’s construction industry research has identified 2,334 hotel-related projects due to start on-site over the coming 12 months.
Work is expected to increase across the spectrum from budget hotels to high-end schemes.
According to the report, London is set to benefit from the bulk of the hotel construction boom across all types of developments. Glenigan also expects £1.6bn-worth of hotel projects to be granted planning permission in the capital this year.
Research from Lodging Econometrics found 77 projects to provide 13,699 rooms in the pipeline in London at the end of last year. However, Glenigan’s market research suggests an even larger pipeline with 371 hotel projects expected to start on-site in the capital this year.
Many hotel developments in London are major developments, such as the £400m Haymarket House scheme in Westminster. Detailed plans have been submitted and if successful, construction could begin next April.
Developer Ocubis has also received planning permission for a £250m plan designed by Hopkins Architects to build 900 hotel rooms across two interlinked towers in Lambeth. A start has been mooted for later this summer.
Additionally, outside of the capital, plans for smaller value hotel schemes are also increasing.
Travelodge plans to build 100 hotels in London and contractor Barnes has just begun on a £51.3m conversion of Gredley House in Stratford, east London, into a 151-bed Travelodge (Project ID: 23031375).
Travelodge also plans to build 40 hotels in South West England and recently appointed consultants Hartnell Taylor Cook to support this programme.
The region with the largest number of hotel starts scheduled for the next year is the North West, where Premier Inn is also rolling out budget hotels including a £26m scheme on Rochdale Road in Manchester, where work should begin in November
Allan Wilén, Glenigan economics director, said: “A gradual rise in household income is expected to fuel growth in discretionary spending on hospitality and leisure experiences over the next three years. This, coupled with a further recovery in overseas tourism, should invigorate the sector, attract investors, and translate into increased project starts.”