Quantification of serviced accommodation supply in the United Kingdom and consideration of related issues
Melvin Gold Consulting Ltd. has prepared a 2nd edition of our report exploring the current situation of serviced accommodation supply in the United Kingdom on behalf of our clients Travelodge. The first report was prepared in 2008 and this revised edition is dated March 2011. Travelodge have kindly agreed to make this research available in the public domain.
Highlights are:
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Based on our research and review of the sector as described and discussed in this report, it is our view that currently there were approximately 728,671 rooms in the UK at 31 December 2010.
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We have uncovered data which reliably quantified UK hotel supply at 497,502 rooms in 1974. If we consider that as a fixed data point and set this against our view of 2010 supply this implies a compound annual growth (CAG) of 1.066% across the 37 year period. Given that we have additionally included Youth Hostels in our supply base, the actual like-for-like figure would be slightly lower.
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From our research we believe that some 39.7% of UK serviced accommodation might be considered as corporate branded and an additional 6.6% is part of consortia, the remainder being Independent (53.7%). Our database identifies 15.8% of accommodation as being in the branded Budget sector, 13.7% as Full Service and 9.9% as Mid-Market. Of course in reality the Mid-Market is the largest sector because most of the Independent supply would also fall within the mid-market definition. Our report also contains regional analysis and data for the largest cities.
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According to our research there are now some 115,196 rooms in the budget sector and indicates that, at the end of 2010, 15.8% of total UK serviced accommodation is within that segment. The largest four budget hotel companies operate over 84% of segment supply. The budget sector has grown at 10.22% per annum in the past decade and exceeded 20% in the prior decade.
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We have constructed a scenario for the UK hotel industry over the next two decades which envisages supply growth at a compound rate of around 0.75% per annum during the next three years, then a return towards the 1% rate for five years from 2014 to 2018 before returning to a rate of some 0.75% from 2019 to 2030. On a compound basis we also envisage the budget sector growing by around 5% per annum until 2020, approximately 2.5% per annum from 2021 to 2024 and some 1.5% from 2025 until the end of that decade. This would see total supply reach 856,750 rooms in 2030, with some 224,266 of these rooms being in the budget segment. Thus the budget segment would reach some 26.2% of total supply in 2030.
To download the full 2011 report, click here
To download the accompanying press release, click here
To download the 2007/8 report, click here