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A Five-Star Refurbishment Market

Diana Szpytma 21 August 2018 1 comment
A Five-Star Refurbishment Market

Accelerated growth in the UK hotels sector is making design a core concern, which is creating an active pipeline of refurbishments up and down the country according to Gideon Levene, head of projects at Styles&Wood

The average daily hotel rate in the UK exceeded the £100 mark this year – a 3.4 per cent year-on-year increase – according to accountant and business adviser BDO’s Hotel Britain 2018 report. It also forecasts that 21,700 more rooms will open in the next two years as a result of the booming demand for hotel space.

For established brands like Mercure, Hilton and Travelodge – which recently announced a £60 million plan to open 12 new hotels in Kent – there are great opportunities for growth as UK tourism is buoyed by the weaker pound. But the heightened demand also creates its own pressures in the form of increased competition. Staying at the leading edge of design is a clear focus for hotels’ business strategies, and refurbishment and fit-out is growing as a result.

Boutique hotels and larger players at the high-end of the market both face aggressive competition from established peers as well as the threat of disruptive new entrants to the sector, like Airbnb. Luxury hotel refurbishments are being driven by a desire to improve interior placemaking as a result.

Of course, it’s never been enough for high-end hotels to just offer well-presented rooms, investing in amenities is also crucial.

Brands want to create some of the best bars, restaurants, gyms and spas in their areas. It helps make the hotel a destination and increasing footfall beyond overnight guests has become the name of the game. For example, at our refurbishment of Native’s London Warehouse – a 166-room aparthotel near Piccadilly Station in Manchester – works include the creation of a new boutique fitness studio, a bistro as well as a cinema on the ground floor. Because schemes like this promise an experience and environment to exceed customers’ expectations, high quality fit-out has a huge role to play.

At the budget end of the market, which competes on price and convenience, creating efficient, functional and comfortable spaces has to be the focus. Customers of budget hotels are unlikely to prioritise the in-hotel experience when making their choice on where to stay, instead comfort and minimalism are the prime concern.

Budget hotels across the country increasingly need to cultivate an identity to stand out from the crowd too. To put the supply boom into context, over 9,000 rooms are due to open in London over the course of 2018, according to PwC – more than opened during 2012 when the capital hosted the Olympics. But this growth is not just limited to the capital, cities like Manchester, Leeds, Liverpool and Edinburgh have growing tourism markets and require hotels for people travelling on business.

While the sector is increasingly competitive, very few chains are focussed on creating communal spaces or amenities. In fact, in certain budget hotels, these may read more like spaces in an up-market hostel.

Instead the trend in refurbishments is to avoid these altogether. Doing so leaves the hoteliers playing in this space with more cash to improve rooms. Hotels we’ve worked on at this end of the market are doing exactly this. At our easyHotel projects in Manchester and Liverpool, room design is all about creating clean space with character to match with easyHotel’s wider brand identity.

Because room design and function is the clear focus of budget hoteliers, these businesses will be at the forefront of room innovation too as competition grows and land values increase. We’ve already seen brands like Yotel do this by bringing sleeping-pod style cabins to a western market, for example.

Refurbishment activity is set to accelerate alongside the boom in demand. The decision that hotels have to make is how to best use the space to reflect their brand. If not, they could miss a huge opportunity to beat the competition.

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