Cardiff has been named as one of the UK’s top locations for hotel investment.

The 2018 Colliers International UK Hotels Market Index ranks Cardiff sixth as a hot spot, for hotel development and acquisition, just behind Bath, Belfast, Cambridge and Bristol, and winning destination Edinburgh.

Cardiff has risen five places from last year in the annual index, which analyses 34 locations across the UK and ranks them according to a set of nine Key Performance Indicators.

Peter Brunt, a director in Colliers International’s Hotels Agency team, said Cardiff’s improved attraction to hotel investors was the result of factors including a significant boost to average room rates as a result of hosting the 2017 Champions League Final.

“Cardiff reached sixth place in this year’s index as a result of a lower active development pipeline for new hotels in the city, and a year-on-year increase of six per cent in average daily rate in 2017.

“It was particularly significant that Cardiff hosted the 2017 Champions League Final in June 2017 at the Principality Stadium, which attracted 175,000 football fans and boosted the average daily rate for that month and raised the overall profile of the area.”

The significance of hosting the 2017 Champions League Final to the Cardiff hospitality industry reflects previous experience of hosting the 2015 Rugby World Cup. Cardiff reached the top of the 2016 Colliers International UK Hotels Market Index due to factors including low active pipeline, low build costs, and string hotel performance as a result of hosting the Rigby World Cup and other events.

The nine key performance Indicators used in the Colliers International UK Hotels Market Index, which is in its third year, are land site prices; build costs; market appetite; valuation exit yields; room occupancy; average daily rate; room occupancy rates; four year RevPAR Trend and active pipeline as a percentage of current supply and construction costs.

The ratings are then consolidated into a single figure and ranked to show which markets are hot and which are not in terms of a desirable location for investors to acquire an existing hotel or develop a new one.

Marc Finney, Head of Hotels & Resorts Consulting, Colliers International said: “Our Index is formulated in such a way that high land and construction costs and sluggish hotel market growth are penalised. That’s why some markets will rank lower than expected.

“Of course this is a general market index and site specific factors will lead to significant variances.”

Top 10 UK Hot Spots 2018 for Hotel Investment and Development:

Ranking

City

1

Edinburgh

2

Bath

3

Belfast

4

Cambridge

5

Bristol

6

Cardiff

7

Plymouth

8

London

9

Oxford

10

Glasgow


 

UK HOTEL MARKET INDEX 2018

Top 10

City

Colliers UK Index 2018

2017 Index

2017 Ranking

Change in position

1

Edinburgh

3.97

3.68

5.00

4

2

Bath

3.90

3.56

12.00

10

3

Belfast

3.78

3.44

19.00

16

4

Cambridge

3.68

3.66

6.00

2

5

Bristol

3.66

3.69

4.00

-1

6

Cardiff

3.63

3.60

11.00

5

7

Plymouth

3.60

3.50

16.00

9

8

London

3.59

3.56

12.00

4

9

Oxford

3.55

3.77

3.00

-6

10

Glasgow

3.47

3.35

23.00

13


DEVELOPMENT/REVPAR INDEX

The Development/RevPAR index is a combination of the land cost, build cost, 2017 Occupancy and 2017 ADR (Colliers Index). This index ranks the best markets with regards to hotel performance in relation to the costs of development.

Rank

City

Development/RevPAR index

1

Belfast

4.38

2

Edinburgh

4.31

3

Bath

4.27

4

Cardiff

4.08

4

Glasgow

4.08