Competition hotting up in city’s burgeoning hotels sector
A director of a major real estate consultancy in Manchester is questioning whether Manchester hotels market can sustain its current growth.
The city will see seven hotel openings in 2017, adding a further 1,333 new rooms, which has led director of the hotel team at Lambert Smith Hampton in Manchester, Alistair Greenhalgh, to raise the issue.
“With an 80% occupancy rate, Manchester’s hotel market continues to outperform the UK average and the city is increasingly seen by investors as a real alternative to London,” he said.
“Hotel development is keeping pace, with more than 1,330 new hotel rooms being built this year. This will add to the 156 hotels currently providing over 16,300 bedrooms in the city of Manchester, city of Salford, Trafford and Bury.”
He said that the four star and budget sectors currently account for 36% and 34% of the bed supply respectively. Of the total supply, 40% is operated under a global or international brands, and 46% are operated by a national or regional brand with the remainder being independent.
Greenhalgh went on: “The Manchester hotel market grew by approximately 2,308 bedrooms between 2012 and 2016, the majority within the budget sector (47%), followed by the four star sector (33%). Consequently most major international brands have a presence in Manchester, including Accor, Marriott, Hilton, Rezidor and IHG.
“Hotel supply is dominated by the big hotel players, reflecting the drive behind the market for corporate and loyalty card programmes.”
He pointed to the list of hotels (below) the majority of confirmed schemes in the city are either of a four-star standard or are within the budget sector, demonstrating the continuing shift in market demand following the recession:
· 260-bedroom City Suites (Aparthotel), Greengate (January)
· 182-bedroom Staycity (Aparthotel), Piccadilly Station (April )
· 150-bedroom Hampton by Hilton (Budget), Old Trafford (Summer)
· 114-bedroom Roomzzz (Aparthotel), Corn Exchange (Autumn)
· 210-bedroom Crowne Plaza (4 Star), Booth St West (late 2017)
· 116-bedroom Staybridge Suites (Aparthotel), Booth St West (late 2017)
· 301-bedroom Motel One (Budget), Cross Street (late 2017)
Figures are provided by AM:PM Hotel Data & Intelligence
Greenhalgh goes on: “The city has seen phenomenal growth over the past 20 years and its population regularly swells with a huge influx of visitors who come to watch the two Premier League football teams, or to attend major events or sample its thriving music, retail and culture scene.
“Fast road and rail connections and an expanding airport provide hoteliers with unrivalled access to international markets, so it is no surprise that investor confidence is so high.
“We believe that occupier demand can sustain current growth, and that the future of Manchester’s hotel sector looks healthy moving forward.
“However, increased competition will challenge private and independent hoteliers to stay at the front of developments in social media and mobile websites to ensure market share is maintained.
“Capital expenditure will be needed to help offset increased competition from the new-build hotels as hoteliers will have to continue to refurbish and upgrade to stay ahead of the new competition.”
