Following a decade of rapid expansion, Liverpool's budget hotel market is now big enough and the city should guard against oversupply in the coming years, according to a new report.
The report, Liverpool Hotel Futures 2011, was commissioned by The Mersey Partnership, the city region's tourist board, and written by hotel development consultancy, Hotel Solutions.
Since 2001 there were 28 new hotels and 3,000 hotel bedrooms added to the city's offer.
The report's authors said new budget hotel development is "unlikely to be needed before 2020."
The report continued: "What Liverpool needs now is a period of consolidation whilst the market recovers and catches up with the increased supply."
Liverpool's hotel market has been "somewhat cushioned" from recent market downturns and recessionary pressures by the positive "bounce" impact of its year as European Capital of Culture in 2008, the report added.
Lorraine Rogers, chief executive of TMP, said: "We've been through a period of unparalleled growth and success in the visitor economy. Investment in hotel development has been vital to the overall growth of the sector in the last decade. This report is a valuable piece of research and will inform the right strategy to deliver further, sustainable growth. It recommends a period of consolidation in the sector before we can expect renewed market potential for further major hotel development beyond 2014."
The city outperforms the UK's average regional city recreational visitor market but lags behind in business visits during the week.
Rogers added: "One immediate challenge we are tackling is how best to increase mid week performance in the sector – how to ensure we attract visitors throughout the week to match the already higher demand for hotel rooms at weekends. TMP and the Visitor Economy Committee have created a group to focus on this part of the market and they have identified ways to help increase mid week visitors."
Jenny Douglas, head of area investment for Liverpool Vision, said: "The continued growth in the number of hotel bedrooms sold year-on-year is testimony to the increasing quality and strength of Liverpool's visitor economy. Hotel operators recognise this, searching out opportunities to introduce or expand their representation in the city.
"In parallel we must ensure that our existing hotels invest and prosper and our work developing international trading links and securing inward investment, combined with events such as next year's Global Entrepreneurship Congress will contribute significantly to the growth of the business based midweek market."
TMP simultaneously announced an increase in the number of visitors to Liverpool in the first half of 2011. July was a record month with 222,000 hotel rooms sold across the city region, 12,000 more than the previous highest recorded month of October 2010.