Business travel is one of the main drivers of the accommodation sector in the UK, with hotels and other room providers raking in billions every year as both domestic and overseas travellers make use of the many hotels, apart hotels and serviced apartments that are located throughout the country.
Business travel continues to grow
But as business travel continues to grow nationwide – Global Business Travel Association’s (GBTA) report shows a 7.4 per cent climb in business travel spend in 2015, and an expected 6.2 per cent increase this year – the market is changing and turning away from traditions.
The internet age means that more people than ever are driven to find the best possible room for their stays, and very often this means moving away from the traditional hotel and towards apart hotels and serviced apartments, which are more comfortable, convenient and private than hotels. On top of this, a younger generation of workers are often on the lookout for ways they can experience cities in the same way as locals do, something they can’t do if staying in a hotel.
The rise of the apart hotel sector
This sort of attitude from business travellers has opened up the accommodation market in the UK to the potential for real growth in new areas, with investors now having the opportunity to put their money into a market that has the real ability to deliver returns, and space to grow thanks to its relatively small impact on the wider market to date.
Despite the demand for something different to hotel rooms, a report from JLL shows that the traditional room providers still control the bulk of the market, especially when it comes to regional cities in the UK. Across regional cities in the UK, only 1.8 per cent of available rooms are in serviced apartments and apart hotels, compared to 98.2 per cent of rooms in hotels. This is compared to London, where 7.5 per cent of all rooms are in apart hotels and serviced apartments.
The rise of the regions
Some regional cities have started to embrace the new age of business travel more than others, however. For example, Liverpool’s buy in as a city to apart hotels and serviced apartments far exceeds that of the wider regional UK. In the north-west city, it’s already the case that 11.8 per cent of all rooms are available in these types of accommodation.
Liverpool is therefore the only city in the UK where less than 90 per cent of all available rooms are in traditional hotels, showing that even though it’s still niche at the moment, there’s a real opportunity for investors to get themselves into the sector and help it grow, and there’s already demand from travellers, who have helped to bring apart hotels into much wider use than they ever have been before.
It’s this changing consumer demand and taste that is helping to drive forward the alternatives to hotels at the moment, and it’s not just in Liverpool either.
Any city where regeneration has helped to drive growth in business, such as Manchester, Leeds and Birmingham, is seeing a real rise in the number of expected apart hotel and serviced apartment rooms being built in the next few years. And with this new attitude from travellers only likely to become more widespread, this is a trend we’re likely to see for some time, meaning investors have a real chance to get themselves a piece of a market that could be about to take off.