Research by JLL’s Hotels and Hospitality Group revealed at this week’s 20th International Hotel Investment Forum (IHIF) in Berlin has highlighted buoyant construction levels across the sector and predicts that the trend is set to continue.

In the UK, hotel construction activity reached £2.5 billion in Q4 2016 (up 2.4% quarter-on-quarter), marking the second consecutive increase over the quarter.

JLL says it believes that further depreciation of the Pound against the United States Dollar and Euro is likely to be good news for the hotel industry, making the UK a more affordable place to visit.

According to data from STR, almost 40,000 new hotel rooms opened in Europe last year, with c. 69,000 currently under construction.

Most construction activity has been concentrated in the upper midscale segment of the market, securing around 25% of all construction projects, followed by the upscale segment at 23%. JLL predicts that this trend is set to continue.

According to JLL hotel investment volumes into the sector are also expected to rise from $20.5 billion dollars in 2016 to $22-£23 billion in 2017 across the Europe and Middle East region.

“This strong construction pipeline demonstrates the strength of the sector in the face of global economic headwinds and challenges from disruptors such as Airbnb,” said Richard Harris, Managing Director of JLL’s Capital Works team.

“There has been an extraordinary growth in consumers looking to discover new experiences, including choosing to rent apartments as their travel accommodation which means that hotel buildings will continue to evolve to stay at the cutting edge of travellers needs,” he said.

HM flew to IHIF on British Airways.

James Wilkinson

Editor-In-Chief, Hotel Management