Hotel market to catch its breath after growth spurt

MANCHESTER will not see any major hotel investment for at least three years because it has reached “tipping point” in terms of supply and demand.

This is the view of Stephen Miles, general manager of the city’s five-star Radisson Edwardian Hotel and chairman of the Manchester Hoteliers’ Association.

He said the financial crisis had merely crystallised an “inevitable” position after heavy investment in the city in recent years.

“In Manchester city centre we have gone from 5,000 rooms to 7,000 rooms very rapidly and we’re now at tipping point where supply is outweighing demand and I think developers realise that and have scaled back.

“I can’t see any new hotel in Manchester for three or four years.”

Mr Miles said he could not even see any new boutique hotels opening in the city centre, due to the challenging economic climate.

“Smaller hotels lack the scale, the reservation systems, delivery engines and obviously the resources of the major brands like ourselves and Hilton.”

The recession has already claimed one high profile victim, with the Yang Sing Oriental Hotel closing down eight months after its launch.

He said the Radisson Edwardian, which opened five years ago, was faring well in the market place, and is currently benefiting from the Conservative Party conference at Manchester Central, which is estimated to be worth £16m to the city.

“It’s great profile for the city to host these major events and I commend the work of the council, Visit Manchester and Marketing Manchester to bring the party conferences to the city.

“I think the Original Modern theme has struck a chord with the parties, it’s a something new and refreshing for delegates as opposed to the traditional seaside venues like the Blackpool.”

He said trade across the whole city was down around 4% year on year, due to the recession, with margins taking a hit as prices are cut to entice bookings.

“The Radisson is operating above the curve. Our occupancy is the same as last year, what has been affected has been our rates, and that has been dictated by corporate travel policies.

“Conferencing revenues have been affected because companies are not holding corporate bashes as much as they used to.”

Having spent £1m last year on giving the hotel a fresh new look, he said the Radisson would focus on providing the best “people and service”.