Manchester has been ranked as the leading regional hotel market in England in the inaugural UK Hotel Market Index from real estate advisor Colliers International.
The authors of the research analysed 36 locations in the UK and ranked them according to key performance indicators to determine hot spots for hotel development and acquisition.
Colliers identified Manchester as England’s premier regional hotel market because of strong investment and valuation parameters and a buoyant performance by its existing hotels.
Only Cardiff emerged above Manchester in the wider UK rankings, partly because of hotel business generated by hosting the Rugby World Cup in 2015.
Manchester also scored highly for hotel occupancy levels last year and in the provision of rooms per population thanks to its burgeoning popularity with both business and leisure visitors.
Of the top five markets for hotel occupancy, Manchester achieved a figure of 81% in 2015, an increase of 2% from 2014. The city’s figure for 2015 matched that for London and was only slightly less than Belfast, 84%, and Glasgow, 83%.
In terms of the existing supply of hotel rooms, Manchester was the top regional location in England outside London with 15,705 rooms, some 3,000 more than in Edinburgh and Birmingham. Liverpool was placed sixth for hotel room supply with 8,233 rooms.
The analysis of available rooms per population saw Manchester placed second only to Bournemouth with 30.7 rooms per 1,000 people.
Also measured was development pipeline of new sites due to open in the next three years. Manchester emerged second only to London with 2,197 rooms scheduled rooms with Liverpool due to see another 315 rooms.
Julian Troup, head of UK hotels agency, based in Colliers Manchester, said: “High land prices in London mean investors are looking outside of the capital for opportunities to spend their cash.
“Consequently, the hotel market in Manchester and across the wider North West continues to go from strength to strength. There is a healthy growth in trade and value in line with the wider economy, and whilst that remains stable due to supporting accommodative monetary policy, this growth should continue in 2016.
“The major North West cities of Manchester and Liverpool are seeing unprecedented growth. Occupancy is growing in both cities, indicating a supply shortage in the market. This is in spite of the fact that a further 1,073 rooms opened in Manchester and Liverpool during 2015.
“In the next year, the majority of openings across the region will be by budget brands with Premier Inn, Travelodge and IHG’s Holiday Inn Express having 14 hotel developments in the pipeline between them.
“These developments would keep Premier Inn as the biggest hotel operator in the region with over 11% of total bed stock. In the midmarket and upmarket sectors, of the major existing operators in the region only IHG has active developments for its Holiday Inn and Crowne Plaza brands.
“We are also predicting an increase in transactional activity on the back of a successful 2015 where Colliers International Hotels has experienced an increase in hotel transactions of about 25% on 2014 levels.”