Get ready for a building boom! The hospitality and leisure sector is primed for growth, offering a golden opportunity for construction companies over the next 18 months. After a significant downturn in 2022, the industry is poised for a resurgence.
This positive outlook is driven by a combination of factors. Rising household incomes are leading to increased discretionary spending on travel and leisure experiences. Coupled with the recovery of overseas tourism, this is attracting investors and fueling a surge in hotel projects.
A Surge in Project Starts
The construction industry is already feeling the effects. Glenigan, a leading construction market research firm, predicts a 14% jump in the value of hotel and leisure projects starting this year, following a 23% decline in 2022.
This growth is being fueled by a surge in planning permissions. In 2023, there’s been a 12% increase in the underlying value of projects securing detailed planning permission. Glenigan’s research has identified a staggering 2,334 hotel-related projects set to begin construction within the next 12 months. This encompasses a wide range of projects, from budget-friendly hotels to luxurious high-end schemes.
London: The Epicenter of Hotel Development
London is expected to be at the forefront of this hotel construction boom, with a massive £1.6 billion worth of hotel projects anticipated to receive planning permission in the capital this year. Research suggests that London alone has 371 hotel projects poised to start construction in 2024.
Major developments are driving this growth. The £400 million Haymarket House scheme in Westminster is one prime example. Detailed plans have been submitted, and if approved, construction could begin as early as next April. Another notable project is the £250 million, 900-room development in Lambeth, designed by Hopkins Architects. Planning permission has already been granted, and construction could begin later this summer.
Smaller projects are also contributing to the growth. Highbride Properties’ £26.3 million plan to transform the Old Spotted Dog in Newham into a 68-bed hotel is one such example. While plans are being revised, work could begin this autumn.
Beyond the Capital: A Nationwide Hotel Boom
The hotel construction boom isn’t limited to London. Across the country, plans for smaller hotel projects are also on the rise. Travelodge, for example, plans to build 100 new hotels in London, while also expanding into other regions, including the South West, where they plan to build 40 new hotels.
The North West is another region experiencing a hotel boom. Premier Inn is leading the charge with a £26 million project in Manchester that’s expected to begin construction in November.
A Steady Flow of Work for Construction
With a plethora of hotel projects in various stages of development across the country, the hospitality and leisure sector is set to provide a steady stream of work for the construction industry in the coming years.
