Oxford has the highest hotel occupancy rate in England, and the second highest in the UK, new research has revealed.

The city is only behind Edinburgh for UK hotel occupancy levels, and is also in the Top 5 for Average Daily Rates for hotel rooms, according to the 2018 UK Hotels Market Index (UKHMI) from global real estate advisor Colliers International.

The report, which is now in its third year, ranks cities according to their strengths for hotel investment and development using a range of key performance indicators.

However, despite strong performances in these areas during 2017, Oxford has dropped six places in the overall UK Hotel market index to 9th place this year from 3rd place last year.

Peter Brunt, a director in Colliers International’s Hotels Agency team, said: “Hotel accommodation in Oxford is in high demand, and this is reflected in current high levels for room occupancy and Average Daily Rates for rooms.

“However, it has slipped down this year’s UK Hotel Market Index as a result of having a higher active hotel pipeline – that is, the total number of rooms expected to enter the Oxford hotels market in the next two years as a percentage of total existing room supply as at the end of 2017.

“Last year the active hotel pipeline in Oxford was 0%, whereas this year it is almost 9% of the total room supply and this will inevitably impact upon occupancy levels and average room rates.”

Hotel developments set for Oxford include a £30m five-storey 140-bedroom hotel on the corner of St Thomas Street that received planning permission last year, and a 180-room budget easyHotel run by the company responsible for easyJet, which is expected to open in the second half of 2019.

The Colliers International UK Hotels Market Index from Colliers International’s is compiled from analysis of nine key performance indicators (KPIs) to score each of 34 locations with a figure from one to five (one being the lowest and five being the highest).

The determining indices include land site prices; build costs; market appetite; valuation exit yields; room occupancy; average daily rate; room occupancy rates; four year RevPAR trend; 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 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: “The data in our third annual report reveals the ever-changing nature of the UK hotels market.

“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 Ten UK Hot Spots 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


 

Detail – Top Ten UK Hot Spots for Hotel Investment and Development; Top 5 Occupancy; Top 5 ADR (Average Daily Rate):

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

           

TOP 5 OCCUPANCY

Rank Occ. % Performance

City

Occ % 2016

Occ % 2017

% Difference

1

Edinburgh

82.1%

83.7%

1.60%

2

Oxford

80.5%

82.6%

2.10%

3

Glasgow

79.6%

82.1%

2.50%

4

London

81.5%

81.7%

0.20%

5

Belfast

79.5%

81.6%

2.10%

         

TOP 5 ADR (AVERAGE DAILY RATE)

Top 5 markets that recorded the highest Average Daily Rates in 2017. 

Rank ADR Performance

City

ADR 2016

ADR 2017

% Change

1

London

143

149

4.12%

2

Bath

116

122

5.28%

3

Edinburgh

94

103

10.35%

4

Oxford

99

102

2.84%

5

Cambridge

92

95

3.83%