Savills: Regions to see pod hotel boom

Research from real estate advisor Savills, is predicting an expansion of pod and smaller format hotels across the regions, with up to four new hotels planned to open in cities across the UK in 2014/15.

The research said that the recently announced and yet to be named 76-pod hotel in Bristol could be the first one delivered this year, with the Moxy, Ikea and Marriott International-backed hotel having also recently acquired a site at Liverpool's Cropper Street. Other brands in the market include Yotel, citizen M, ZHotel and Whitbread's Premier Hubs.

The firm reports that with most pod hotels costing between £45 and £100 per night, the expansion of the format across the UK could require traditional hotels to become more competitive.

According to Savills, the issues relating to converting existing stock in historic regional city centres is also contributing to the rise of smaller formats and pod hotels, with buildings often not having the floor plates necessary for larger rooms.

Martin Rogers, director of regional hotels at Savills, said: "The rise of pods and smaller format hotels throughout the UK can largely be attributed to cost. If room count can be increased by providing smaller rooms without significantly impacting on average daily rates there can, in the right circumstances, be a positive impact on value.

"Land values have also contributed, for example in cities where land values have increased by between 10-20%, such as Bristol, Manchester and York, developers are now having to intensify sites and making rooms smaller is the easiest way."

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