Conversions to Hotels on the Rise

The annual UK Hotel Development Opportunities 2019 report reveals that the composition of new supply within the sector is altering. Whilst the development of new build hotel rooms constitutes the greatest proportion of new supply, during 2018 there was a significant rise in hotel conversions, with a 42% year-on-year uplift. With space within town and city centres at a premium, many developers are turning to existing buildings and converting them into new hotels as, typically, the cost is significantly less than developing a new build. In addition, while many new builds have been created on green belt land, conversions are being made to existing, vacant buildings in a bid to regenerate town centres.

It is important to remember that there are a number of pros and cons to both conversions and new builds. For instance, the UK’s rich history appeals to an international audience, particularly hotels converted from stately homes, however developers need to be mindful that the conversion of a listed building can be a drawn out process and many older buildings do not have adequate electrical, plumbing, or mechanical functions to keep up with the demand of today’s corporate traveller. They will end up spending just as much money replacing these systems as they would installing brand new ones. Conversely, new builds are ‘new’ and offer designers the scope to create an original prototype in keeping with today’s trends, however, the development process can be both costly and lengthy. Whether brand new or ‘recycled,’ whichever way a developer decides to go, caution and objectivity is essential to creating a profitable hotel.