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UK Seaside Resorts Worst Affected by Room Closures

Sarah-Jane Lampe 14 October 2013

New research from Melvin Gold Consulting has revealed that almost 40,000 UK hotel rooms have closed over the past decade, with coastal areas such as Cornwall, Blackpool and Torbay being some of the worst affected by the difficult market conditions.

The report also found that a significant number of rooms closed in the key London boroughs of Westminster, Kensington and Chelsea. The three boroughs have seen 3,277 room closures collectively over the past 10 years. The largest London establishment, Regent Palace closed more than 1,000 rooms alone at the end of 2006.

However, closures in resort areas are the most significant category overall, with Cornwall, Blackpool, Torbay, Bournemouth, the Isle of Wight and The Channel Islands, all featuring high levels of closures.

Whereas new hotel openings outnumbered the closures in the London boroughs and larger cities, this was not the case in the coastal areas. The study indicates that at least 39,174 rooms have closed in 2,139 hotels.

Currently, the UK serviced accommodation sector comprises some 730,000 rooms of which 43.5% are part of hotel chains with consortia membership comprising 4.7%. Although independent unbranded properties are still the majority of supply (51%).

The branded budget hotel sector has grown 10% per annum in the past decade and exceeded 20% in the prior decade and now has more than 130,000 rooms, some 17.8% of total service accommodation.

Hotel industry consultant, Melvin Gold said: “The transition of the UK hotel industry that is in progress is further evidenced by our research.

“We have found hotels changing use to residential accommodation, care homes, and student accommodation or being demolished to facilitate new development. It is important to note that it does not herald the end of the independent hotel, provided they are well-invested and market focused. I still expect them to comprise up to 40% of the future UK hotel market, but the majority of UK hotels will be branded within the next decade.

“This process of change reflects the requirements of the 21st century consumer and also creates increased employment opportunities as the supply-base moves towards larger, branded hotels. From 2003 to the end of 2013, 103,612 new hotel rooms have opened in the UK. Even taking account of closures I expect continued growth and the UK hotel industry to have more than 850,000 rooms by 2030.”