Northern cities set to dominate UK hotel development

By Sophie Witts

- Last updated on GMT

Northern cities set to dominate UK hotel development

Related tags: Liverpool

Northern cities are tipped to dominate future hotel development in the UK, according to a new study.

Manchester, Leeds, Chester, Liverpool and York all feature in a list of the top 10 UK hot spots for hotel investment compiled by Colliers International.

The property firm ranked 36 locations according to land value, occupancy rates and construction costs.

Cardiff came top in the list due to its low active pipeline and strong hotel performance over the last three years – boosted by the 2015 Rugby World Cup.

Manchester was ranked second, despite a relatively small number of recent openings, due to its popularity with both business and leisure visitors.

London only ranked seventh in the list despite accounting for 47 per cent of the 286,966 rooms surveyed.

“High land prices in London are causing investors to look outside of the capital for opportunities to spend their cash,” said Marc Finney, head of hotels & resorts consulting at Colliers International.

“London is by far the largest market with almost as much supply as all of the other markets combined and has recently been a star in terms of revenue per available room. However, given that our index punishes high land costs, high construction costs, sluggish growth in 2015 and a strong active pipeline, it only ranks seventh in our index.” 

Bradford and Hull ranked lowest overall with both recording Average Daily Rates (ADRs) below the regional UK average.

However, Colliers noted that both markets were amongst the fastest growing in the UK.

Collier's Top 10 UK Hot Spots for Hotel Investment:

1 Cardiff

2 Manchester

3 Leeds

4 Chester

5 Liverpool

6 York

7 London

8 Edinburgh

9 Brighton

10 Bath

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