BATH HOTEL FUTURES - Bath and North East Somerset · Bath Hotel Futures 2015 Hotel Solutions July...

BATH HOTEL FUTURES

2015

Final Report

Prepared for:

Bath & North East Somerset Council

July 2015

Bath Hotel Futures 2015

Hotel Solutions July 2015

CONTENTS

EXECUTIVE SUMMARY ................................................................... i

1. INTRODUCTION ...................................................................... 1 1.1 Background to the Study ........................................................................................... 1 1.2 Study Objective ........................................................................................................... 1 1.3 Uses of the Study ......................................................................................................... 2 1.4 Scope of the Study ..................................................................................................... 2 1.5 Study Methodology .................................................................................................... 3 1.6 Structure of the Report ............................................................................................... 4

2. BATH HOTEL SUPPLY ............................................................... 5 2.1. Current Supply ............................................................................................................. 5 2.2. Changes Since 2009 ................................................................................................... 8 2.3. Planned and Proposed Hotel Development ....................................................... 12 2.4. Comparisons with Other Historic Cities ................................................................. 16

3. CURRENT HOTEL PERFORMANCE & MARKETS ..................... 20 3.1. Occupancy, Achieved Room Rates and Revpar .............................................. 20 3.2 Patterns of Demand ................................................................................................. 22 3.3. Midweek Markets ...................................................................................................... 24 3.4. Weekend Markets ..................................................................................................... 26 3.5. Market Trends ............................................................................................................. 28 3.6 Denied Business ......................................................................................................... 28 3.7. Prospects beyond 2015 ............................................................................................ 29 3.8. Growth in Hotel Demand 2008-2015 ..................................................................... 30

4. STRATEGIC CONTEXT AND DRIVERS OF GROWTH .............. 31 4.1. The Context for Future Growth in the Bath Hotel Market .................................. 31 4.2 The Sub-Regional Strategy for Growth .................................................................. 31 4.3. Economic Performance and Outlook in Bath ..................................................... 33 4.4. National Tourism Trends ............................................................................................ 35 4.5. The Characteristics of Tourism in Bath ................................................................... 37 4.6. Market and Consumer Response Data ................................................................ 39 4.7. Conference Tourism Performance in Bath ........................................................... 40 4.8. Bath Tourism Policies ................................................................................................. 41 4.9. Planning Policies Relevant to Hotel Development ............................................. 44 4.10. Key Projects Affecting Hotel Demand .................................................................. 50 4.11. Conclusions ................................................................................................................ 52

5. FUTURE POTENTIAL FOR HOTEL DEVELOPMENT ................... 53 5.1 Understanding The Requirements and Potential for New Hotel Supply ........ 53 5.2 Hotel Developer & Operator Interest in Bath ....................................................... 61 5.3 Hotel Site Availability ................................................................................................ 74

6. CONCLUSIONS & RECOMMENDATIONS ............................. 76 6.1. The Requirements & Potential for Hotel Development in Bath ........................ 76 6.2. Tackling the Sites Issue .............................................................................................. 79 6.3. The Timing of Hotel Development .......................................................................... 80 6.4. A Locational Strategy for Hotel Development in Bath ...................................... 81 6.5. Implications for the Placemaking Plan ................................................................. 82 6.6. Supporting Existing Hotels, Guest Houses and B&Bs ........................................... 82 6.7. Moving Forwards ....................................................................................................... 83 6.8. Concluding Remarks ................................................................................................ 84



APPENDICES

1 Bath Hotels Interviewed

2 Glossary of Hotel Definitions

3. Heritage City Hotel Stock and Development Comparisons

4. Bath Hotel Developer Testing – Sampling & Response

Lynn Thomason Andrew Keeling

Hotel Solutions Hotel Solutions

Deleanor House Mill Field House

High Street Mill Fields

Coleby Bassingham

Lincoln Lincoln

LN5 0AG LN5 9NP

t. 01522 811255 t. 01522 789702

e. [email protected] e. [email protected]

mailto:[email protected]

mailto:[email protected]


Hotel Solutions July 2015 i

EXECUTIVE SUMMARY

__________________________________________________________________________

The Purpose of the Study

The 2015 Bath Hotel Futures Study has been commissioned by Bath & North East Somerset

Council to provide an up-to-date assessment of the future potential and priorities for hotel

development in Bath through to 2030, to help inform the preparation, finalisation and

implementation of a number of key strategy and policy documents: the update of the

Bath Destination Management Plan, the finalisation of the Placemaking Plan, and the

implementation of the Bath City Riverside Enterprise Area Masterplan. The study updates

the findings of the Bath & North East Somerset Visitor Accommodation Study completed

by The Tourism Company and Hotel Solutions in 2009, in relation to hotel development

opportunities in the city.

Current Hotel Supply

Bath currently has 28 hotels and serviced apartment operations, with a total of 1,591 letting

bedrooms. This includes the Gainsborough Bath Spa which opened on 1 July 2015.

BATH HOTEL SUPPLY – JULY 2015

Standard Hotels Rooms % of

Rooms 5 star 4 306 19.2

Boutique 5 221 13.9

4 star 3 309 19.4

3 star 5 192 12.1

2 star 2 79 5.0

Upper-tier Budget1 1 126 7.9

Budget 3 299 18.8

Serviced Apartments 5 59 3.7

Total Hotels 28 1591 100.0

Notes:

1. Brands including Holiday Inn Express, Ramada Encore and Hampton by Hilton


Hotel Solutions July 2015 ii

The city's current hotel offer is weighted towards upscale, full service provision, with 5 star,

boutique and 4 star hotels accounting for 52.5% of total stock. Boutique hotels vary in style

and standard from the MGallery branded Francis Hotel to the luxury AA 3 Red star

Queensberry, midmarket Abbey Hotel and 3 star Metro Harington's Hotel. Budget/limited

service hotels account for 26.7% of Bath's current hotel supply.

Changes in Hotel Supply 2009-2015

Taking account of new hotel openings and changes to existing hotels, Bath's total stock of

hotel accommodation has increased by 18.2% (250 bedrooms) between 2009 and 2015.

The most marked trend has been the significant growth in boutique hotel provision through

the repositioning of 2 and 3 star hotels. There has also been an increase in 4 and 5 star

hotel provision through the upgrading of existing hotels. Other key trends have been an

increase in budget hotel supply, with the opening of a new Premier Inn in December 2013;

a reduction in midmarket full service hotel provision through upgrading to boutique and 4

star hotels; and the gradual increase in serviced apartment supply.

Pipeline Hotel Supply Changes to 2017

There are two hotels currently under construction in Bath - a 177-bedroom 4 star Apex

hotel, with extensive conference facilities for up to 400 delegates, and a 148-bedroom,

budget boutique Z Hotel as part of the Saw Close casino development. The Z Hotel is due

to open in 2016, while the Apex Hotel is scheduled to open early in 2017. The other

significant planned hotel project is the redevelopment of the Pratts Hotel and adjoining

Halcyon Hotel and other properties into a 121-bedroom Hotel Indigo boutique hotel.

Subject to planning permission being granted this hotel could open at the end of 2016. It

will result in a net increase of 54 bedrooms. There are also proposals at various stages for

further boutique hotels in Bath. Assuming that the Apex, Z Hotel and Hotel Indigo all open

by 2017, Bath's hotel stock will have increased by 47% (631 rooms) since 2009, with the

most significant changes being the increase in 5 star, 4 star and especially boutique hotel

provision, and the loss of 3 star stock.


Hotel Solutions July 2015 iii

CHANGES IN BATH HOTEL SUPPLY 2009-2017

Standard of Hotel Hotel Supply % Change

2009-2017

(Rooms) 2009 2017

Hotels Rooms Hotels Rooms 5 star 2 181 4 306 +69.1

Boutique 1 29 5 323 +1013.8

4 star 3 223 4 486 +117.9

3 star 10 449 4 146 -67.5

Lower Grade 3 101 2 79 -21.8

Budget/Limited Service 3 317 5 573 +80.7

Serviced Apartments 1 43 5 61 +41.8

Total 25 1343 29 1974 +47.0

Comparisons with Other Heritage Cities

In comparison to Oxford, Cambridge, Chester, York and Exeter:

In terms of total hotel supply Bath has the lowest number of hotel bedrooms;

Bath has the most upmarket hotel supply in terms of 5 star and boutique hotel

provision and 5 star guest houses, and more limited supplies of 3 star, 2 star and

budget hotels.

Hotel development trends have been similar across all six comparator cities

between 2009 and 2015: there has been a general move upmarket, with the

upgrading and repositioning of 3 star hotels as 4 star and boutique hotels, the

opening of new 5 star and boutique hotels in some cities, and some loss of poorer

quality 2 star/ lower grade hotel stock; new Premier Inn and/or Travelodge budget

hotels have opened in most of the cities (other than Oxford); and the supply of

serviced apartments and aparthotels has gradually increased:

All of the comparator cities look set to see more hotel development than Bath

going forward (if all of the current hotel proposals are progressed).


Hotel Solutions July 2015 iv

Current Hotel Performance and Markets

Estimated average annual room occupancies, achieved room rates and revpar figures for

Bath hotels for 2012 - 2014 and forecast figures for 2015 are summarised in the table

overleaf, based on the information provided by the city's hotel managers and owners.

Key points to note in relation to hotel performance in Bath and changes since 2012 are as

follows:

Hotel performance in Bath is very strong at all levels in the market, and well ahead

of national averages. Boutique, 3 star and budget hotels are performing particularly

well in the city. 5 star hotels achieve lower room occupancies but very high

average room rates, largely due to the numbers of suites that they have, which

command high prices but do not always fill.

Hotel performance in Bath has generally strengthened between 2012 and 2014 and

looks set to improve further in 2015.

Boutique hotel occupancies and average room rates dipped in 2013 as new

boutique hotels, guest houses and B&Bs have opened. Boutique hotel occupancies

have quickly recovered in 2014 and 2015 as the new boutique hotels have become

more established, and average room rates have started to increase for some

boutique hotels in 2015 .

5 star hotel occupancies have improved but average room rates have dropped

back slightly as hotels have reduced their room rates to drive occupancy.

3 star hotel performance has strengthened year on year.

The opening of the new Premier Inn in December 2013 does not appear to have

had anything other than a marginal impact on the city's established hotels, with

most hotels reporting occupancy and average room rate growth in 2014, and the

Premier Inn quickly achieving high occupancies.


___________________________________________________________________________________________________________________________________________

Hotel Solutions July 2015 v

BATH HOTEL PERFORMANCE 2012-2015

Standard of Hotel Average Annual Room

Occupancy

%

Average Annual Achieved

Room Rate4

£

Average Annual Revpar5

£

2012 2013 2014 2015f3 2012 2013 2014 2015f3 2012 2013 2014 2015f3

UK Provincial Hotels (All Standards)1 69.8 72.6 75 766 59.22 59.94 62.07 64.736 41.32 43.53 46.37 49.146

UK Provincial 3/4 Star Chain Hotels2 69.6 72.0 73.9 n/a 69.97 71.46 76.49 n/a 48.72 51.48 56.53 n/a

5 star 65 n/a 72 74 169 n/a 165 177 110 n/a 119 131

4 star n/a n/a 76 79 n/a n/a 92 100 n/a n/a 70 79

Boutique 86 80 85 86 129 112 116 121 111 89 99 105

3 star 77 81 82 83 73 74 77 78 56 60 63 64

Budget n/a n/a 87 88 n/a n/a 77 83 n/a n/a 67 73

Serviced Apartments n/a n/a 83 84 n/a n/a 107 114 n/a n/a 88 96

All Hotels n/a n/a 81 83 n/a n/a 100 107 n/a n/a 81 88

Source: Hotel Solutions – July 2015

Notes 1. Source: STR Global

2. Source: TRI Hotstats UK Chain Hotels Market Review

3. Based on forecast figures provided by hotel managers

4. The amount of rooms revenue (excluding food and beverage income) that hotels achieve per occupied room net of VAT, breakfast (if included) and

discounts and commission charges.

5. The amount of rooms revenue (excluding food and beverage income) that hotels achieve per available room net of VAT, breakfast (if included) and

discounts and commission charges

6. PwC UK Hotel Forecast 2015


__________________________________________________________________________________________

vi


Friday and Saturday occupancies are very high for Bath hotels. Hotels of all

standards consistently fill and turn business away on Saturday nights throughout the

year and achieve high occupancies on Friday nights, particularly during the

summer months. Friday occupancies dip a little in winter for most hotels.

Midweek and Sunday occupancies are more seasonal. They are strong in the

summer but weaker during the winter months, especially January, February and

March. 3 star and budget hotels achieve the highest midweek occupancies, both

during the summer and in the winter. They attract stronger year-round demand

from more price conscious corporate customers and overseas tourists, and also

attract business from contractors working on construction and shop fitting projects

in the city. Some boutique hotels are also successfully driving midweek business

through OTAs (online travel agents such as booking.com and Expedia) and a more

flexible room rate strategy.

There is a significant difference between midweek and Friday and Saturday

achieved room rates at all levels in the Bath hotel market. A differential of £30-50 is

typical. Some hotels reported a differential of £80-100. There is also a differential

between summer and winter rates, particularly during the winter , when midweek

and Sunday room rates are much lower and Friday night prices also reduce.

The domestic leisure break and overseas tourist markets are the key markets for

Bath hotels. Weekend break demand is very strong and high-rated, particularly

from the London market. Midweek break business is more price driven, with the

focus primarily on attracting the grey market through OTAs. Overseas tourist

demand is strongest for budget and 3 star hotels, suggesting a significant price

conscious segment in this market. A lot of overseas tourists also book through OTAs.

Corporate demand for hotel accommodation in Bath is relatively weak: there are

few major companies in Bath that generate good volumes of business for the city's

hotels. Corporate demand is stronger for budget hotels, suggesting that this market

is largely price driven in Bath.

Residential conferences are a very minor market for most of Bath's hotels, other

than Bailbrook House, which has extensive conference facilities. Most of the city's

other hotels have very limited conference and meeting facilities so are unable to

target the residential conference market.


__________________________________________________________________________________________

vii


Growth in Hotel Demand 2008-2015

In terms of total roomnight demand the Bath hotel market has grown by 23% between 2008

and 2015, driven by both an increase in hotel supply and an improvement in occupancy

performance. This equates to an average annual growth rate of 3.3% over the last 7 years.

BATH - GROWTH IN HOTEL DEMAND 2008-2015

Year Total Satisfied

Roomnight

Demand

% Increase in

Roomnights

2008-2015

%

2008 367,646

2015 452,001 + 23%

The Potential for Future Growth in Demand for Hotel Accommodation in Bath

An assessment of the strategic context for economic development and tourism growth in

Bath shows the following in terms of the potential for future growth in demand for hotel

accommodation in the city, and the potential for additional hotel development:

Sub-regional and local economic and tourism policies and spatial and land use

planning frameworks provide a strong basis for economic growth and the

development of Bath's visitor economy, presenting a confident environment for

continued growth in the city's hotel market and further hotel development.

National forecasts for domestic tourism show significant growth in markets for which

Bath has a comparative advantage. The additional boost provided by an even

stronger forecasted growth in overseas tourism will be important in securing new

tourist stays in Bath.

The planned significant growth in Bath's economy, improved transport

infrastructure, and the positive environment provided by the universities, are all

strong drivers for growth in hotel demand in the city. The Riverside Enterprise Area

provides a particular catalyst for growth.

Proposals for new leisure facilities and attractions, and an enhanced events

programme, should lead to future growth in demand for hotel accommodation in

the city from leisure markets.


__________________________________________________________________________________________

viii


Future Requirements & Potential for Hotel Development in Bath

In order to gauge future requirements and potential for hotel development in Bath we have:

Calculated the level of new hotel provision that might be needed to achieve a 5%

p.a. growth in staying tourism in the city through to 2030;

Modelled potential requirements for additional hotel bedrooms under three (Low,

Medium and High) scenarios of potential future growth in midweek demand for

hotel accommodation in the city;

Spoken with national hotel companies to gauge their interest in opening new

hotels in Bath and identify any barriers that they are facing in terms of bringing

forward hotel schemes in the city.

These exercises show potential for significant hotel development in Bath both in terms of

market potential and hotel company interest. The key question is how much of this potential

does the city want to accommodate and at what level in the market? The answers to these

questions will depend on the future strategy for Bath as a visitor destination:

If the city wants to grow staying tourism volumes, it will clearly need more hotel

provision. With hotels trading at such high occupancies for much of the year

growth in staying tourism will need to be largely supply led. There is otherwise little

hotel capacity to support staying tourism growth. The quantum of new hotel

provision needed will depend on the targets for growing Bath's staying visitor

market. The type of new hotel provision required will depend on the markets that

the city wants to attract.

If the city wants to convert more day visitors to staying visitors it will need more

lower-priced hotel accommodation that is affordable for the visitors that currently

stay in hotels in surrounding locations and commute into Bath as day visitors.

If the city wants to attract more companies it will need a greater supply of hotel

accommodation at a price point that companies can afford to pay for single

occupancy room rates.

If Bath is to remain competitive as a staying visitor destination it will need a good

mix of high quality, contemporary hotel accommodation, including a strong

independent hotel offer. Care is needed to avoid undermining the independent

hotel sector, which is a key part of Bath's distinctiveness as a place to stay.


__________________________________________________________________________________________

ix


Our assessments of the requirements and potential for additional hotel provision in Bath show

no immediate requirement before 2020 for additional upscale/full service hotel provision,

beyond the Gainsborough Bath Spa and pipeline Apex and Indigo hotels. The market needs

to absorb this new supply first. There remains very strong interest however from hotel

companies and independent hoteliers that would like to open upscale hotels in Bath. There is

no need to deter this interest, but no need either to actively encourage it. Further upscale

hotel development should be left to the market to determine.

Our growth projections show that Bath should be able to support another budget/limited

service hotel within the next 5 years, in addition to the Z Hotel. Beyond 2020 we are also

showing potential for further budget/limited service hotels through until at least 2030.

There are good reasons for encouraging budget/limited service hotel development in Bath in

terms of the clear demand/potential for more of this type of hotel accommodation in the

city; the new business that budget hotels will generate as a result of their brand strength and

customer base, national marketing, central reservations and referral business from sister

hotels; and the contribution that budget hotels can make to the evening restaurant

economy in the city. There are also some negatives as to why significant budget/limited hotel

development might not be so good for Bath in terms of their potential impact on the city's

remaining 3 star hotels, its guest house and B&B sector and hotels in the surrounding area,

and the potential that they may attract more stag and hen parties. Care is therefore needed

to attract budget/limited service hotel products and brands that will add to the city's hotel

offer, with the focus perhaps being more on attracting upper-tier budget brands e.g.

Hampton by Hilton, and/or some of the new budget boutique brands e.g. Moxy and Aloft.

Our research shows market potential for additional serviced apartment provision in Bath, and

possibly an aparthotel. This type of supply would broaden the city's hotel offer. It would

appeal to the corporate market, especially to longer staying corporate visitors. It is also

becoming increasingly popular with leisure visitors as a result of the greater space, flexibility

and sometimes value for money that it can offer. Serviced apartments have particular

appeal to families and overseas tourists for these reasons. The only potential negative from an

increase in serviced apartments is that they also appeal to the hen party market.


__________________________________________________________________________________________

x


Tackling the Sites Issue

The availability of suitable and affordable sites for hotel development is the key barrier to

growing Bath's hotel supply. Relatively few sites come up and there is such strong competition

from student accommodation and residential development against which a hotel use

cannot compete on value. How best to address this issue should be a key consideration for

the Council. There are two key roles that it could play if it wants to intervene proactively to

address the hotel sites issue:

As landowner and developer/investor - many of the key regeneration/ development

sites in the city centre are in total or partial Council ownership. The Council thus has

more control over the type of uses that these sites go for, and the type of hotels that

could be included in development schemes (if a hotel use is seen as appropriate

within the mix).

By working with land and property owners to bring forward sites and buildings that

would be suitable for hotel development and match them with key target hotel

products and brands that will help to achieve the strategy for growing staying

tourism in the city (whatever that looks like when finally agreed).

If the Council decides to take either or both of the more interventionist approaches to

addressing the hotel sites issue discussed above, there are two aspects to consider - the

timing of when hotel development needs to come forward, and a locational strategy for

different types and standards of hotel, to optimise the use of available sites and to achieve

the strategy for staying tourism growth.


__________________________________________________________________________________________

xi


The Timing of Hotel Development

In terms of the timing of new hotel development:

The most immediate requirement is for another budget/limited service hotel or an

aparthotel.

Additional upscale/full service hotel provision will not be required much before

2022/23.

The phased release of sites in the Enterprise Area, some of which could incorporate

a hotel, provides an opportunity to exert some control on when hotel schemes might

come forward; the trick will be to tie this in with the market need in terms of the most

appropriate type of hotel with both market and destination/scheme fit.

A Locational Strategy for Hotel Development

In terms of a locational strategy:

Prime sites in the historic core of the city centre should be prioritised for upscale/full

service hotel development;

Budget/limited service and aparthotel development can be more appropriately

developed on and steered towards edge of city centre and riverside sites;

There could be a case for considering budget hotel development in outer locations

that are well served by bus routes;

Buildings of character should be used for boutique hotels;

Redundant offices may be more suited for conversion to limited service hotels, but

might also present redevelopment rather than conversion opportunities where more

development/a better site solution and scheme could be achieved.

Once the locational strategy has been agreed, it will be important to communicate it to

stakeholders, including site owners and hotel companies; act on it as a Council where direct

intervention is achievable (e.g. where the Council is a full or partial site owner and/or could

act as the developer / investor for a scheme that includes a hotel); and where possible build

it into policy and strategy making, in order to give direction to the market about what the

Council is looking to see delivered in terms of new hotel provision


__________________________________________________________________________________________

xii


Implications for the Placemaking Plan

In finalising the Placemaking Plan:

There is a need to plan for a greater number of additional bedrooms in the city

centre than is identified in the Core Strategy. This Hotel Futures update presents the

market evidence and rationale to do so, with clear links to the previous work and the

context of a much improved climate for investment.

Including the suggested locational strategy for hotel development within the Plan

should be considered as one route to directing and giving clarity to the hotel

development market.

Further work is needed to more closely assess the suitability of key regeneration sites

to the requirements of hotel developers and operators, and to match best fit hotel

products and brands in each case.

It may be appropriate for the Placemaking Plan to also address the issue of the

conversion of redundant office stock to hotel use, recognising the benefits this can

bring to the destination, without enforcing the replacement jobs criteria, which will

be a significant barrier to hotel conversion, particularly at the budget level.

Supporting Existing Hotels, Guest Houses and B&Bs

While further hotel development will be needed to achieve targets and capitalise on the

potential for growth in staying tourism, supporting existing (and new)hotels, guest houses and

B&Bs will also be important through:

Effective management, maintenance and improvement of the city's public realm

fabric;

Further development of the city's visitor offer to maintain and broaden its appeal as

a visitor destination and help encourage longer stays;

Effective marketing of Bath as a visitor destination, focused on boosting Sunday to

Thursday business, particularly during the winter;

Bringing forward office development to grow corporate demand for hotel

accommodation in the city.


__________________________________________________________________________________________

xiii


Moving Forwards

In terms of moving ahead, further work will be needed in terms of:

Fleshing out the locational strategy for hotel development in terms of more

detailed assessment of sites and matching best fit hotel products and brands. This

could be expanded to include the identification and assessment of additional sites

with potential for hotel development, both within Council ownership and privately

owned. Both strands would involve working with site owners to communicate and

deliver the hotel investment strategy.

Targeting best fit hotel brands, with a particular focus on those that can most help

deliver the required growth in staying tourism and help grow the Bath hotel market

in terms of generating new demand and attracting new markets. This might

include some additional targets dependent upon the understanding that comes

out of the more detailed sites work.

Feeding into more detailed financial and physical appraisals being led by other

consultancy teams but requiring a specialist input.

Modelling the potential impact of additional budget/ limited service hotel provision

on Bath’s independent guest house sector.

Understanding the options for and potential benefits from direct Council

investment in hotel development schemes, as other local authorities across the

country are increasingly doing.

Concluding Comments

This is a time of great opportunity for B&NES Council to shape the future of Bath in the interests

of its long term viability, sustainability and well-being. The visitor economy undoubtedly has a

key role to play in this, but without increased hotel capacity will be unable to support the city

in fulfilling its potential for staying tourism growth. With such strong hotel performance in the

city; the levels of interest in opening new hotels here; and an emerging development

framework that involves planning for major areas of change, there is a real opportunity to

help overcome the obstacles to delivery faced by hotel developers. This is a unique

opportunity that it is critical to get right, using the evidence from this Hotel Futures Study as a

basis to inform and guide forward planning.


__________________________________________________________________________________________

1


1. INTRODUCTION

1.1 Background to the Study

1.1.1 The 2015 Bath Hotel Futures Study has been commissioned by Bath & North East

Somerset Council to provide an up-to-date assessment of the future potential and

priorities for hotel development in Bath through to 2030, to help inform the

preparation, finalisation and implementation of a number of key strategy and policy

documents: the update of the Bath Destination Management Plan, the finalisation of

the Placemaking Plan, and the implementation of the Bath City Riverside Enterprise

Area Masterplan. The study updates the findings of the Bath & North East Somerset

Visitor Accommodation Study completed by The Tourism Company and Hotel

Solutions in 2009, in relation to hotel development opportunities in the city.

1.2 Study Objective

1.2.1 The objective of the study was to make a robust, independent, evidence-based

assessment of the potential for the future development of Bath's hotel offer, both in

terms of the opening of new hotels and the expansion, development and

repositioning of existing hotels, based on a thorough examination of the following:

The Bath hotel supply and how this has been changing and is set to change in

the future as pipeline hotel schemes are delivered;

The current performance of the city's hotel sector, at each level in the market;

The prospects for future growth in demand for hotel accommodation in Bath

from the key markets, and what will drive this growth;

Comparisons with hotel provision and development in other leading heritage

city destinations in England;

Hotel company interest in opening new hotels in Bath.


__________________________________________________________________________________________

2


1.3 Uses of the Study

1.3.1 The study findings will be used to:

Inform the finalisation of the Placemaking Plan;

Input into the update of the Bath Destination Management Plan;

Inform the implementation of the Bath City Riverside Enterprise Area

Masterplan, particularly in terms of guiding Council decisions regarding the

inclusion of hotels within schemes for key regeneration and development sites

that are in full or partial Council ownership;

Guide decision-making on planning applications for new hotel development

projects;

Inform decision-making on planning applications for the expansion of existing

hotels;

Identify other interventions that the Council might consider to influence hotel

development in Bath in line with destination development priorities (once

agreed);

Identify other possible interventions that the Council can make to grow and

develop the city's hotel market to support existing and new hotels.

1.4 Scope of the Study

1.4.1. The geographic focus of the Hotel Futures Study has been on Bath city centre and

outskirts. The study has not covered other parts of Bath & North East Somerset.

1.4.2. In terms of types of hotel the study has looked at the potential for:

Full service 4 and 5 star hotels;

Boutique and lifestyle hotels;

Midmarket/ 3 star hotels;

Budget/limited service hotels;

Serviced apartments/ aparthotels;

1.4.3. Appendix 2 provides a glossary of definitions for these types of hotel.

1.4.4. The study has not looked at the Bath guest house and B&B sector, either in terms of its

future growth potential or the potential impact of new hotel development on guest

house and B&B performance.


__________________________________________________________________________________________

3


1.5 Study Methodology

1.5.1. The study has involved the following modules of research and consultation:

An audit of the current (July 2015) hotel supply in Bath and how this has

changed since 2009 in terms of new hotel openings and the expansion,

development and repositioning of existing hotels. The audit has been based on

information provided by Bath Tourism Plus, supplemented by our own Internet

searches.

A review of hotel development proposals to identify the likely pipeline changes

to the city's hotel supply in terms of new hotel openings and the development

of existing hotels.

Benchmarking hotel provision and development activity in Bath against

current and pipeline hotel supplies in Oxford, Cambridge, York, Chester and

Exeter, as comparator heritage destinations, to provide a wider context for

considering hotel development requirements for Bath to remain competitive

against these destinations.

A survey of hotel managers and owners in the city to gather data and

information on room occupancy levels and trends, patterns of demand,

achieved room rates, market mix, levels of denials, market trends, and future

development plans. Interviews were conducted primarily through face-to-face

interviews supplemented with telephone interviews as required. We also

obtained hotel performance data from hotel company head offices for some

of the city's hotels, and derived hotel performance figures for one hotel that

declined to take part in our survey from information that we were able to

obtain from our industry contacts. A total of 18 hotels took part in the survey.

They are listed at Appendix 1. We are very grateful to all of the hotel managers

and owners that gave so freely of their time and information to enable us to

produce robust and accurate hotel performance data and market insight

information for the city.

A review of relevant policy and strategy documents and employment and

population forecasts to establish the policy framework for hotel development

in the city and identify likely drivers of future growth in hotel demand.


__________________________________________________________________________________________

4


A review of national tourism trends and forecasts of relevance to Bath.

A review of available research information and data on leisure and

conference tourism in Bath and the city's visitor markets.

Stakeholder consultations to gather information on wider destination

development objectives and major developments with the potential to deliver

new demand for hotels.

The preparation of hotel demand projections (using our Hotel Futures hotel

demand forecasting model) to provide a quantitative estimate of the level of

new hotel development that future market growth might support in Bath

through until 2030.

A survey of national, regional and local hotel companies to test hotel

developer/operator interest in Bath, establish site and location requirements,

and identify any obstacles that hotel companies face relative to investing in

the city.

1.6 Structure of the Report

1.6.1. The report comprises chapters setting out the key findings and conclusions of the

study regarding:

Current hotel supply, recent changes, planned hotel development and

comparisons with other heritage cities;

Current hotel performance and markets:

Future market prospects and drivers of growth in hotel demand;

The future requirements and potential for hotel development in the city.

1.6.2. The final chapter sets out our recommendations for potential Council intervention to

guide and support future hotel development in Bath and grow the city's hotel market

to support existing and new hotels.


______________________________________________________________________________________

Hotel Solutions July 2015 5

2. BATH HOTEL SUPPLY

______________________________________________________________________________________

2.1. Current Supply

2.1.1. There are currently 28 hotels and serviced apartment operations in Bath, with a

total of 1,591 letting bedrooms. This includes the Gainsborough Bath Spa which

opened on 1 July 2015. This current hotel supply is analysed below by standard

and listed fully in the table overleaf.

Table 1

BATH HOTEL SUPPLY – JULY 2015

Standard Hotels Rooms % of

Rooms 5 star 4 306 19.2

Boutique 5 221 13.9

4 star 3 309 19.4

3 star 5 192 12.1

2 star 2 79 5.0

Upper-tier Budget1 1 126 7.9

Budget 3 299 18.8

Serviced Apartments 5 59 3.7

Total Hotels 28 1591 100.0

Notes:

2. Brands including Holiday Inn Express, Ramada Encore and Hampton by Hilton

2.1.2. Bath has a mix of different standards and styles of hotel. The city's current hotel

supply is weighted more towards upscale, full service provision, with 5 star,

boutique and 4 star hotels accounting for 52.5% of total stock. Boutique hotels

vary in style and standard from the MGallery branded Francis Hotel to the luxury

AA 3 Red star Queensberry, midmarket Abbey Hotel and 3 star Metro Harington's

Hotel. Budget/limited service hotels account for 26.7% of Bath's current hotel

supply. Most of the city's serviced apartment operations are small, with 2 or 3

apartments. SACO Bath Serviced Apartments is the only larger serviced

apartment operation.


______________________________________________________________________________________


Table 2

BATH CITY HOTEL SUPPLY – JULY 2015

Hotel Standard1 Rooms Brand The Royal Crescent 5 star 45 Relais & Chateaux

The Bath Priory 5 star 33 Andrew Brownsword Hotels

Macdonald Bath Spa 5 star 129 Macdonald Hotels & Resorts

The Gainsborough Bath Spa 5 star 99 Leading Hotels of the World

Hilton Bath City 4 star 173 Hilton

Bailbrook House Hotel 4 star Country House 94 Hand Picked Hotels

Combe Grove Manor 4 star Country House 42 The Hotel Collection

Francis Hotel Bath Boutique (4 star) 98 MGallery (Accor Hotels)

The Queensberry Boutique (AA 3 Red star) 29

The Abbey Boutique (AA 3 star) 60

The Halcyon Boutique (VB Approved) 21

Haringtons Hotel Boutique (AA 3 star Metro) 13

Lansdown Grove 3 star 54 Coast & Country (Shearings)

The Royal 3 star 35

Pratt's VB Approved (was 3 star) 46 Atlas Hotels

Old Mill Hotel & Lodge, Batheaston 3 star 35

The County Hotel 3 star 22 Seasons Holidays

Redcar Lower Grade 41

Parade Park Lower Grade (VB Approved) 38

Holiday Inn Express Upper Tier Budget 126 Holiday Inn Express (IHG)

Premier Inn Budget 108 Premier Inn

Travelodge Bath Waterside Budget 125 Travelodge

Travelodge Bath Central Budget 66 Travelodge

SACO Bath Serviced Apartments Serviced Apartments 43 SACO

Harington's Apartments Serviced Apartments 3

Halcyon Apartments Serviced Apartments 8

Bath House Apartments Serviced Apartments 2

Bath Circle Serviced Apartments 3

Notes:

1. VisitBritain, AA, booking.com or TripAdvisor ratings. Boutique hotels are those that

describe themselves as such on their websites. There is no official designation of a

boutique hotel.

2.1.3. In addition to hotels, Bath also has 10 large 5 star and boutique guest houses and

B&Bs, with a total of 132 letting bedrooms, which compete to some extent with

the city's hotels.


______________________________________________________________________________________


Table 3

BATH 5 STAR/ BOUTIQUE GUEST HOUSES/ B&Bs – JULY 2015

Establishment Standard Rooms The Ayrlington 5 star 16

Brindleys Boutique 6

Dorian House 5 star Boutique 13

Dukes Boutique 17

Grays Boutique 12

One Three Nine Boutique 10

Paradise House 5 star 11

Tasburgh House 5 star Boutique 12

The Windsor 5 star 15

Villa Magdala 5 star 20

2.1.4. Beyond Bath there are a further 9 hotels in surrounding locations including

Bradford-on-Avon, Colerne, Limpley Stoke, Freshford, Pensford, Trowle Common

and Wick, with a total of 309 letting bedrooms, which compete to some extent

with Bath hotels. They range from luxury 4 and 5 star country house hotels to 3 star

hotels.

Table 4

HOTEL SUPPLY SURROUNDING BATH – JULY 2015

Hotel/Location Standard Rooms Brand

Bradford-on-Avon Woolley Grange Luxury Family Hotel 25 Luxury Family Hotels

Best Western Leigh Park 3 star Country House 45 Best Western

Widbrook Grange 3 star 20

Trowle Common The Moonraker Hotel 3 star Country House 21

Limpley Stoke Best Western Limpley Stoke 3 star Country House 64 Best Western

Colerne Lucknam Park 5 Red star Country House 42 Relais & Chateaux

Pride of Britain Hotels

Freshford Homewood Park 4 star Country House 21 Longleat Hotels

Pensford The Pig near Bath Boutique Country House 29 The Pig

Wick

Tracy Park Golf & Country

Hotel

3 star Golf & Country House

Hotel

42


______________________________________________________________________________________


2.2. Changes Since 2009

New Hotels

2.2.1. Two new hotels have opened in Bath since 2009:

The Premier Inn Bath City Centre opened in December 2013, with 108

bedrooms.

The £16 million, 5 star Gainsborough Bath Spa hotel and spa opened on 1

July 2015, as the UK's first thermal spa hotel. It has 99 bedrooms and suites,

a spa village with thermal pools, saunas, steam rooms, an ice chamber,

treatment rooms and fitness suite; two function/ conference rooms, a

restaurant and bar. It is owned and operated by Malaysian luxury hotel

operator YTL Hotels and will trade at the very top end of the market, with

midweek room rates starting at £285 room only and prices for a Saturday

night starting at £395.

2.2.2. The city's serviced apartment supply has gradually increased in recent years with

the opening of the Halcyon Apartments (in 2014) and the Harington's, Bath House

and Bath Circle apartments.

2.2.3. The city's supply of boutique guest houses and B&Bs has gradually increased since

2009, with the repositioning of the Dukes Hotel as a boutique guest house and

Cheriton House guest house as the Grays boutique B&B, and the opening of

Brindleys boutique B&B.


______________________________________________________________________________________


Hotel Extensions, Refurbishment and Repositioning

2.2.4. Our research has identified the following changes to Bath's hotel supply since

2009 in terms of investment in existing hotels:

The Royal Crescent underwent a complete, £5m refurbishment in 2013

and 2014 under its new owners Topland Group plc, to restore it to one of

the UK's leading luxury hotels.

The Macdonald Bath Spa is currently in the process of refurbishing 109

bedrooms in 2015.

Bailbrook House underwent a £10m refurbishment in 2013 following its

acquisition in 2012 by Hand Picked Hotels to reposition the property as a

4 star hotel. The work included the remodelling of the Mansion House to

create 13 new feature bedrooms.

The Francis Hotel was completely refurbished and repositioned as an

Accor MGallery boutique hotel in 2012 at a cost of £6m.

The Abbey Hotel was acquired by Ian and Christa Taylor in February 2012.

They have gradually upgraded and repositioned it as a midmarket

boutique hotel. The hotel left the Best Western marketing consortium in

September 2014 to operate as an independent hotel.

The 2 star George's Hotel reopened as The Halcyon boutique hotel in 2010,

following a £3m makeover.

The Hilton Bath City has added 23 bedrooms through the conversion of

some of its conference rooms.

Some of the Lansdown Grove Hotel's bedrooms have been upgraded in

the last 2 years.

The Royal has invested £700k in the upgrading of the hotel's bathrooms.

The 3 star Dukes Hotel has been repositioned as the Dukes boutique guest

house.


______________________________________________________________________________________


The upgrading of the Holiday Inn Express to the new generation Holiday

Inn Express bedroom product will commence in August 2015.

The Travelodge Bath Waterside was upgraded to the new Travelodge

bedroom product in 2013, and the Travelodge Bath Central was

upgraded in 2014

2015 Changes in Hotel Ownership

2.2.4. The following hotels have changed ownership in 2015:

Ian and Christa Taylor, owners of the Abbey Hotel, acquired the 20-

bedroom Villa Magdala in June 2015 from its retiring owners. They

reportedly have plans to upgrade the property with new ideas and

concepts.

Rebecca Whittington, one of the sisters behind the Scarlet and Bedruthan

Steps eco-friendly boutique hotels in Cornwall acquired Combe Grove

Manor in July 2015 from The Hotel Collection.

Changes in Bath Hotel Supply 2009-2015

2.2.5. Taking account of new hotel openings and changes to existing hotels, Bath's total

stock of hotel accommodation has increased by 18.2% (250 bedrooms) between

2009 and 2015. There has been a substantial move upmarket in terms of hotel

provision in the city. The most marked trend has been the significant growth in

boutique hotel provision. This has increased sixfold since 2009, albeit from a low

base of just 38 bedrooms, through the repositioning of 2 and 3 star hotels. There

has also been an increase in 4 and 5 star hotel provision. Other key trends have

been an increase in budget/limited service hotel supply, with the opening of the

Premier Inn; a reduction in midmarket full service hotel provision through

upgrading to boutique and 4 star hotels; and the gradual increase in serviced

apartment supply.


______________________________________________________________________________________


Table 5



2009-2015

(Rooms) 2009 2015


Boutique 1 29 5 221 +662.1

4 star 3 223 3 309 +38.6

3 star 10 449 5 192 -57.2

Lower Grade 3 101 2 79 -21.8

Upper-Tier Budget 1 126 1 126 0

Budget 2 191 3 299 +56.5


Total 23 1343 28 1591 +18.5

Changes to the Hotel Supply in the Surrounding Area

2.2.6. Our research has identified the following changes to the hotel supply surrounding

Bath since 2009:

Luxury Family Hotels acquired Woolley Grange, near Bradford-on-Avon,

from the administrators of Von Essen Hotels in 2011 and has since

refurbished the hotel to a luxury boutique family country house hotel.

Longleat Hotels acquired Homewood Park at Freshford from the

administrators of Von Essen Hotels in 2011 and has since renovated it to a

contemporary country house hotel and spa.

The Old Manor at Trowle Common was acquired by new owners in 2013

and has been renamed as The Moonraker Hotel following refurbishment.

Widbrook Grange at Bradford-on-Avon has new owners.

Home Grown Hotels acquired Hunstrete House at Pensford in 2013 and

reopened it as The Pig near Bath boutique country house hotel in March

2014

The Tracy Park Hotel at Wick was fully refurbished and added 18 bedrooms

in 2013.


______________________________________________________________________________________


2.3. Planned and Proposed Hotel Development

New Hotels Under Construction

2.3.1. There are two hotels currently under construction in Bath - a 177-bedroom 4 star

Apex hotel on James Street West, with extensive conference facilities for up to

400 delegates, and a 148-bedroom, budget boutique Z Hotel as part of the Saw

Close casino development. The Z Hotel is due to open in 2016, while the Apex

Hotel is scheduled to open early in 2017. Further details of the two hotels are

given in the table overleaf.

Proposed New Hotels

2.3.2. The only planning application that has been approved for another new hotel in

Bath is for the conversion of the former King Edward's School on Broad Street to a

12-bedroom boutique hotel and pub. Details are give in the table overleaf.

2.3.3. Bath & North East Somerset Council has also been in pre-application discussions

about a proposal for the conversion of an office building to a 56-bedroom hotel.

2.3.4. A planning application for a 98-bedroom Travelodge next to the Holiday Inn

Express at Brougham Hayes was refused in 2012 and lost at appeal.

2.3.5. A previous permission that was live at the time of the last study, for the conversion

of Green Park House to a hotel, has not happened. It is now to be developed for

student accommodation.


___________________________________________________________________________________________________________________________________________


Table 6

BATH – PLANNED/ PROPOSED NEW HOTELS – AS AT JULY 2015

Proposed Hotel Location Standard No

Rooms

Current Status Planned

Opening Year Apex James Street West 4 star 177 Under construction following the demolition of the

Kingsmead House office building on the site. The hotel will

have extensive conference and events facilities for up to

400 delegates, a restaurant and bar, and a leisure pool

and gym. Total investment: £35m

Early 2017

Z Hotel Saw Close Budget

Boutique

148 Under construction. The hotel is being developed as part

of the £14m casino project at Saw Close

2016

Hotel Indigo South Parade Boutique 121 (54 new

rooms)

Atlas Hotels, owners of Pratt's Hotel, has acquired the

adjacent Halcyon Hotel and other linked properties on

South Parade, with a view to converting all of them into a

121-bedroom Hotel Indigo boutique hotel, with

restaurant, bar and gym, that it will operate under a

franchise agreement with InterContinental Hotels Group

(IHG)

2016

Carfax Hotel Great Pulteney

Street

Luxury

Boutique

40 On hold. Plans for the redevelopment and expansion of

the former Carfax temperance hotel into a 40-bedroom

high-end boutique hotel with restaurant and bar have

been dropped following opposition from local residents.

Owners, GECO Properties UK, have indicated that they

intend to draw up new proposals for the redevelopment

of the hotel to take account of the objections. Newbury-

based hotel operator The Vineyard Group is involved in

overseeing the development and management of the

hotel.

n/a

Former King

Edward's School

Broad Street Boutique 12 Planning permission was granted in 2010 and renewed in

2013 for the conversion of the former King Edward's

School into a12-bedroom hotel and pub.

n/a

Francis Hotel Queen Square Boutique 21 Planning permission was granted in 2012 for an extension

to provide an additional 21 bedrooms. It is not known

whether this will proceed.

n/a


______________________________________________________________________________________


Proposed Development of Existing Hotels

2.3.6. Our research has identified the following proposed investment in the expansion,

development and/or upgrading of existing hotels in Bath:

Atlas Hotels is planning to redevelop the Pratts Hotel and adjoining

Halcyon Hotel and other properties into a 121-bedroom Hotel Indigo

boutique hotel to be operated under a franchise agreement with

InterContinental Hotels Group (IHG). Subject to planning permission being

granted the company aims to open the new hotel at the end of 2016.The

scheme will result in a net increase of 54 bedrooms.

Plans to convert the former Carfax Hotel on Great Pulteney Street into a

40-bedroom high-end boutique hotel are currently on hold following

objections from local residents. The owners of the property, GECO

Properties, have indicated that they intend to draw up a revised scheme.

Further information is given in the table overleaf.

The Royal Crescent has plans to develop a new double-storey

conservatory in 2017 that will give the hotel a larger meeting space to

enable it to target the residential meetings market.

The Bath Priory will be refurbished in 2016.

The Macdonald Bath Spa has plans to redevelop its spa facilities.

The Abbey will refurbish all of its bathrooms in 2015, taking it to a 4 star

boutique standard. It is also adding 2 bedrooms in 2015 and considering

plans to develop a new meeting room.

One of Bath's budget hotels is considering a possible extension to add a

further 19 bedrooms.

The Halcyon Apartments is opening an additional two suites in July 2015.

Another of Bath's serviced apartment operations may add 6 apartments.


______________________________________________________________________________________


Changes in Bath Hotel Supply 2009-2017

2.3.6. The trends in terms of growth in upscale and budget/limited service hotel

provision and the loss of midmarket stock are set to continue in 2016 and 2017

with the opening of the Apex and Hotel Indigo at the upper end of the market,

the Z Hotel in terms of budget/ limited service hotel provision, and the loss of the

Pratt's 3 star hotel to the Hotel Indigo conversion. By 2017 the city's hotel stock will

have increased by 47% (631 rooms) since 2009, with the most significant changes

being the increase in 5 star, 4 star and especially boutique hotel provision, and

the loss of 3 star stock.

Table 7



2009-2017

(Rooms) 2009 2017


Boutique 1 29 5 323 +1013.8

4 star 3 223 4 486 +117.9

3 star 10 449 4 146 -67.5

Lower Grade 3 101 2 79 -21.8

Budget/Limited Service 3 317 5 573 +80.7


Total 25 1343 29 1974 +47.0


______________________________________________________________________________________


2.4. Comparisons with Other Historic Cities

2.4.1. Appendix 3 provides comparisons of current (July 2015) hotel supply, changes in

hotel supply between 2009 and 2015, and planned hotel development in Bath

with Oxford, Cambridge, Chester, York and Exeter. Key observations on these

comparisons are as follows:.

a) Current Hotel Supply

Total Hotel Supply

2.4.2. In terms of total hotel supply Bath has the lowest number of hotel bedrooms of

any of the comparator cities:

York has the most significant hotel supply - almost double the number of

hotel bedrooms that Bath has.

Oxford, Cambridge and Chester have similar numbers of hotel bedrooms -

300-600 more than Bath.

Exeter has a similar number of hotel bedrooms to Bath.

Standard of Hotels

2.4.3. Bath has the most upmarket hotel supply in terms of 5 star and boutique hotel


budget hotels.

Bath has four 5 star hotels compared to only one in Oxford, York and

Chester and none in Cambridge and Exeter.

Bath has a similar number of boutique hotel bedrooms to Oxford and York

but more than double the boutique hotel supplies of Cambridge, Chester

and Exeter.


______________________________________________________________________________________


Boutique hotels in all six cities are predominantly independent hotels.

Boutique hotel brands represented in the cities are as follows:

o MGallery - Bath

o Malmaison - Oxford

o Hotel du Vin - Cambridge and York

o Hotel Indigo - York

o Abode - Chester and Exeter

o Chapter - Exeter

Bath has the lowest number of 4 star hotel bedrooms. Cambridge, York

and Chester have more than double the number of 4 star hotel bedrooms

that Bath has.

Bath has by far the lowest stock of 3 star and 2 star/lower grade hotel

bedrooms.

Bath has a significant stock of 5 star and boutique guest houses. This type

of accommodation has not so far developed to any extent in the other

cities: Oxford, York and Chester each have only one 5 star guest house,

while Cambridge and Exeter have none.

Exeter and York have two upper-tier budget hotels - a Holiday Inn Express

and a Hampton by Hilton in each case. Bath, Cambridge, Chester and

Oxford each have a Holiday Inn Express.

Bath has the lowest number of budget hotel bedrooms. York and

Cambridge have double the number of budget hotel bedrooms that Bath

has.

Serviced apartments and aparthotels comprise a relatively small element

of the hotel supplies of the six cities. Oxford, Cambridge, York and Chester

have more serviced apartments than Bath. Only Exeter has a smaller

supply of this type of accommodation.


______________________________________________________________________________________


b) Hotel Development 2009-2015

2.4.4. Hotel development trends have been similar across all six comparator cities

between 2009 and 2015: there has been a general move upmarket, with the

upgrading and repositioning of 3 star hotels as 4 star and boutique hotels, the

opening of new 5 star and boutique hotels in some cities, and some loss of poorer

quality 2 star/ lower grade hotel stock; new Premier Inn and/or Travelodge

budget hotels have opened in most of the cities (other than Oxford); and the

supply of serviced apartments and aparthotels has gradually increased:

Bath and York are the only cities that have seen 5 star hotel development.

Bath has seen the most significant increase in boutique hotel provision. This

has been through the repositioning of existing 2 and 3 star hotels. No

entirely new boutique hotels have opened in Bath. All of the other five

cities have seen the opening of new boutique hotels, including a branded

Hotel Indigo in York and an Abode branded boutique hotel in Chester. In

Exeter the former Barcelona boutique hotel has been rebranded under

the Chapter Hotels boutique hotel brand.

None of the six cities have seen the opening of new 4 star hotels in the last

6 years. Two 4 star hotels in Chester have extended.

In terms of upper-tier budget hotel openings, Hampton by Hilton hotels

have opened in York and Exeter. In York the Ramada Encore has been

repositioned as a Travelodge, resulting in only a marginal net change in

the city's upper-tier budget hotel supply.

All of the cities apart from Oxford have seen an increase in budget hotel

provision. Cambridge has seen a significant increase in its budget hotel

supply, with the opening of two Premier Inn and two Travelodge hotels

since 2009. Exeter has seen the opening of two Premier Inns (with a third

due to open in October 2015), while York has seen the opening of a new

Premier Inn and the repositioning of the Ramada Encore to a Travelodge.

Chester has seen the opening of a new Premier Inn but the closure of the

former Comfort Inn. A Travelodge also opened in Chester in 2010 but was

subsequently sold in 2013 for conversion to student accommodation. Bath

has seen the opening of a Premier Inn.


______________________________________________________________________________________


Bath, York and Chester have each seen the closure of a 2 star hotel.

All of the six cities have seen a gradual increase in serviced apartment/

aparthotel provision. Cambridge, York and Chester have seen more

significant rises in their supplies of these types of accommodation. Bath,

Oxford and Exeter have seen only a marginal growth in such provision.

c) Planned Hotel Development

2.4.5. All of the comparator cities look set to see more hotel development than Bath

going forward (if all of the current hotel proposals are progressed):

York and Cambridge are set to see an increase in 5 star hotel provision,

with the planned expansion of The Grand in York and the current

upgrading of the University Arms in Cambridge as a landmark hotel for the

city.

Bath is the only city with a new 4 star hotel currently under construction,

however proposals for new 4 star hotels are also being progressed in

Cambridge and look likely to come forward in Oxford, Exeter and possibly

York.

There are plans for Hotel Indigo boutique hotels in Bath and Oxford and

proposals for new small independent boutique hotels in Bath, Oxford and

Cambridge.

Bath is the only city that is set to see the opening of a budget boutique

hotel, with the Z Hotel being progressed here.

At the 3 star level, a Hilton Garden Inn is planned in York and 3 star hotel

schemes could come forward in Cambridge, Chester and Exeter.

A second Travelodge is currently under construction in Oxford, while a

fourth Premier Inn will open in Exeter in October 2015. There are plans for

Ibis budget hotels in Cambridge and Chester. Bath, York, Chester and

Oxford are all target locations for further Premier Inn hotels, while

Travelodge has Exeter, York and Bath as targets for additional hotels.

A 133-apartment aparthotel has been approved in Cambridge, while

Roomzzz has plans to open an aparthotel in York.


______________________________________________________________________________________


3. CURRENT HOTEL PERFORMANCE & MARKETS

_______________________________________________________________________________________

3.1. Occupancy, Achieved Room Rates1 and Revpar2

3.1.1. Our estimates of average annual room occupancies, achieved room rates and

revpar figures for Bath hotels for 2012 - 2014 and forecast figures for 2015 are

summarised in the table overleaf. These figures are based on the information

provided by the city's hotel managers and owners.

3.1.2. Key points to note in relation to hotel performance in Bath and changes since 2012

are as follows:

Hotel performance in Bath is very strong at all levels in the market, and well

ahead of national averages.

Boutique, 3 star and budget hotels are performing particularly well in the

city. 5 star hotels achieve lower room occupancies but very high average

room rates, largely due to the numbers of suites that they have, which

command high prices but do not always fill.

Hotel performance in Bath has generally strengthened between 2012 and

2014 and looks set to improve further in 2015.

Occupancies and average room rates are rebuilding for some hotels

following reopening after major refurbishment.

Boutique hotel occupancies and average room rates dipped in 2013 as

new boutique hotels, guest houses and B&Bs have opened. Boutique hotel

occupancies have quickly recovered in 2014 and 2015 as the new boutique

hotels have become more established, and average room rates have

started to increase for some boutique hotels in 2015 .

1 The amount of rooms revenue (excluding food and beverage income) that hotels achieve per

occupied room net of VAT, breakfast (if included) and discounts and commission charges. 2 The amount of rooms revenue (excluding food and beverage income) that hotels achieve per

available room net of VAT, breakfast (if included) and discounts and commission charges.


___________________________________________________________________________________________________________________________________________


Table 8

BATH HOTEL PERFORMANCE 2012-2015

Standard of Hotel Average Annual Room

Occupancy

%

Average Annual Achieved

Room Rate4

£

Average Annual Revpar5

£

2012 2013 2014 2015f3 2012 2013 2014 2015f3 2012 2013 2014 2015f3

UK Provincial Hotels (All Standards)1 69.8 72.6 75 766 59.22 59.94 62.07 64.736 41.32 43.53 46.37 49.146

UK Provincial 3/4 Star Chain Hotels2 69.6 72.0 73.9 n/a 69.97 71.46 76.49 n/a 48.72 51.48 56.53 n/a

5 star 65 n/a 72 74 169 n/a 165 177 110 n/a 119 131

4 star n/a n/a 76 79 n/a n/a 92 100 n/a n/a 70 79

Boutique 86 80 85 86 129 112 116 121 111 89 99 105

3 star 77 81 82 83 73 74 77 78 56 60 63 64

Budget n/a n/a 87 88 n/a n/a 77 83 n/a n/a 67 73

Serviced Apartments n/a n/a 83 84 n/a n/a 107 114 n/a n/a 88 96

All Hotels n/a n/a 81 83 n/a n/a 100 107 n/a n/a 81 88


Notes 1. Source: STR Global

2. Source: TRI Hotstats UK Chain Hotels Market Review

3. Based on forecast figures provided by hotel managers

4. The amount of rooms revenue (excluding food and beverage income) that hotels achieve per occupied room net of VAT, breakfast (if included) and

discounts and commission charges.

5. The amount of rooms revenue (excluding food and beverage income) that hotels achieve per available room net of VAT, breakfast (if included) and

discounts and commission charges

6. PwC UK Hotel Forecast 2015


________________________________________________________________________________________


5 star hotel occupancies have improved but average room rates have dropped

back slightly as hotels have reduced their room rates to drive occupancy.

3 star hotel performance has strengthened year on year.

Some 3 star and boutique hotels have successfully grown their occupancies by

driving more midweek business through more effective use of OTAs1, especially

booking.com, and greater flexibility on room rates.

The opening of the new Premier Inn in December 2013 does not appear to have

had anything other than a marginal impact on the city's established hotels, with

most hotels reporting occupancy and average room rate growth in 2014, and

the Premier Inn quickly achieving high occupancies.

3.2 Patterns of Demand

3.2.1. Our estimates of average annual weekday and weekend occupancies for hotels

in Bath for 2014 are summarised in the table below.

Table 9

BATH HOTELS - WEEKDAY/ WEEKEND OCCUPANCIES – 2014

Standard Typical Room Occupancy

%

Mon-

Thurs

Fri Sat Sun

5 Star Hotels Winter 56 71 91 45

Summer 72 90 95 67


Summer 81 90 97 71

Boutique Hotels Winter 73 90 99 67

Summer 88 92 99 81


Summer 91 96 99 73

Budget Hotels Winter 81 85 96 56

Summer 91 96 99 81


1 Online travel agents, such as booking.com, LateRooms, Expedia, hotels.com,

lastminute.com


________________________________________________________________________________________


3.2.2. Key points to note are as follows:

Friday and Saturday occupancies are very high for Bath hotels. Hotels of all

standards consistently fill and turn business away on Saturday nights throughout

the year and achieve high occupancies on Friday nights, particularly during the

summer months. Friday occupancies dip a little in winter for most hotels.

Midweek and Sunday occupancies are more seasonal. They are strong in the

summer but weaker during the winter months, especially January, February and

March. 3 star and budget hotels achieve the highest midweek occupancies,

both during the summer and in the winter. They attract stronger year-round

demand from more price conscious corporate customers and overseas tourists,

and also attract business from contractors working on construction and shop

fitting projects in the city. Some boutique hotels are also successfully driving

midweek business through OTAs (online travel agents such as booking.com and

Expedia) and a more flexible room rate strategy.

There is a significant difference between midweek and Friday and Saturday

achieved room rates at all levels in the Bath hotel market. A differential of £30-50

is typical. Some hotels reported a differential of £80-100. There is also a

differential between summer and winter rates, particularly during the winter ,

when midweek and Sunday room rates are much lower and Friday night prices

also reduce.


________________________________________________________________________________________


3.3. Midweek Markets

3.3.1. Our estimates of the midweek market mix for Bath hotels are set out in the table

below, based on the estimates provided by the city's hotel managers and owners.

Table 10

BATH HOTELS - ESTIMATED MIDWEEK MARKET MIX 2014

Standard

of Hotel

Market

Corporate/

University

%

Contractors

%

Residential

Conference

%

UK Leisure

Breaks

%

Overseas

Tourists

%

Group

Tours

%

5 Star 7 5 72 15 1

4 Star 22 26 26 11 15

Boutique 16 1 55 20 8

3 Star 7 1 1 42 25 24

Budget 33 8 19 39 1

3.3.2. Our key findings regarding midweek demand for hotel accommodation in Bath are

as follows:

Corporate demand for hotel accommodation in Bath is relatively weak,

particularly at the top end of the market. There are few major companies in

Bath that generate good volumes of business for the city's hotels. Corporate

demand is stronger for budget hotels, suggesting that this market is largely

price driven in Bath. Few hotels reported attracting any corporate business

from Bristol companies.

Residential conferences are a very minor market for most of Bath's hotels,

other than Bailbrook House, which as a former residential conference centre

has extensive conference facilities. Most of the city's other hotels have very

limited conference and meeting facilities so are unable to target the

residential conference market. The residential conferences that the city's

hotels attract tend to be relatively small (10-30 delegates) and stay for 1-2

nights. Demand comes primarily from companies in London and the M4

Corridor.

Budget hotels attract midweek demand from contractors working on

construction and shop fitting projects in the city.


________________________________________________________________________________________


Bath's universities generate some midweek business for the city's hotels from

visiting academics, examiners, conference delegates and parents visiting

their children or dropping them off in September. University graduations and

open days generate significant demand for hotel accommodation.

The Bath Christmas Market is the only other event that noticeably generates

midweek business for the city's hotels.

The domestic leisure break market is the key midweek market for most of

Bath's hotels, particularly its 5 star and boutique hotels. Leisure break

customers typically come from within a 2 hour drive of the city and stay for

2-3 nights in the week. The grey market is the key source of midweek leisure

break business for the city's hotels. Hotels with spas attract good midweek

demand for spa breaks. Most hotels drive midweek leisure break business

through OTAs, but are trying to reduce their reliance on these booking

channels to avoid having to pay the commission charges that they levy.

Midweek leisure break business tends to be more offer-driven in the winter

months.

Overseas tourists are a strong market for Bath's budget and 3 star hotels,

suggesting a significant price-conscious segment in this market. Upscale, full

service hotels also attract some midweek demand from overseas tourists.

Bath hotels attract overseas tourists from a wide range of different countries

including North America, Germany, Spain, France, the Netherlands,

Scandinavia, Australia/NZ, China, Japan, Korea and Russia. Overseas tourists

mostly visit Bath between May and October. The Chinese market visits all

year round, including in January and February, booking primarily through

booking.com. Overseas tourists tend to stay 2 nights in Bath as part of a tour

of the UK, frequently as their second stop after London. Most of Bath's hotels

undertake very little pro-active overseas marketing as they are able to

attract sufficient demand from the UK leisure break market.

Group tours are a key midweek market for the Lansdown Grove, which is

owned by Shearings Holidays, and for one 4 star hotel. This is otherwise a

minor market for some of the city's other hotels. Group tour business tends to

be lower-rated. Hotels do not therefore take it as they are able to fill with

business from higher-rated leisure markets. Group tours are a mix of UK and

overseas tours, particularly from China and Japan, typically staying 2-4

nights in Bath.


________________________________________________________________________________________


3.4. Weekend Markets

3.4.1. Our estimates of the weekend market mix for Bath hotels are set out in the table

below, based on the estimates provided by the city's hotel managers and owners.

Table 11

BATH HOTELS - ESTIMATED WEEKEND MARKET MIX 2014

Standard

of Hotel

Market

UK Leisure

Breaks

%

Group

Tours

%

Overseas

Tourists

%

Weddings/

Functions

%

Hen

Parties

%

5 Star 85 11 4

4 Star 74 3 7 9 7

Boutique 66 3 22 9

3 Star 76 3 16 5

Budget 41 3 40 5 11

3.4.2. Our key findings regarding weekend demand for hotel accommodation in Bath are

as follows:

Domestic leisure breaks are the key weekend market for Bath hotels.

Weekend break guests typically stay for 1-2 nights. Many hotels apply a

minimum 2 night stay restriction at weekends but are not always able to

achieve this, especially during the winter and shoulder season months.

Weekend leisure break guests tend to be younger than during the week.

They are most typically couples aged 30-50, travelling from within a 2 hour

drive time of the city. London is a key source market for upscale hotels.

Overseas tourists are the other key weekend market for the city's hotels

between May and October. Demand is strongest for budget hotels.

Group tours are a very minor weekend market for Bath hotels as this business

is too low-rated to be of interest to them at weekends. The weekend tours

that hotels take are generally on high room rates.

Weddings and functions are a minor market for the city's hotels, which

concentrate on the weekend break market, which is more likely to deliver

two night stays, whereas wedding guests generally only want a single night

stay.


________________________________________________________________________________________


Hen parties are a significant secondary weekend market for some hotels, in

particular budget and boutique hotels.

The Bath Christmas Market is the only event that generates significant

weekend demand for Bath's hotels. While other events and festivals are

important as part of Bath's overall visitor offer, few seem to generate hotel

stays in their own right. Events that some hotels identified as noticeably

generating weekend business for them are summarised in the table below.

Table 12

EVENTS THAT GENERATE WEEKEND BUSINESS FOR SOME BATH HOTELS

Event Number of Hotels

Identifying the Event

as a Generator of

Weekend Demand

Bath Half Marathon 4

Bath Rugby matches 3

Jane Austen Festival 3

Great Bath Feast 2

Bath Music Festival 2

Bath to Bristol Marathon 2

Bath Races 2

Bath Mozartfest 1

Race for Life 1

Tour of Britain 1

Race for Life 1

Glastonbury 1

Badminton Horse Trials 1


________________________________________________________________________________________


3.5. Market Trends

3.5.1. Our discussions with the city's hotel managers and owners identified the following

key trends in the Bath hotel market:

MoD business has reduced as the army bases around Bath have closed.

The residential conference market reduced significantly during the

recession. In line with the national trend it has slowly started to come back

for those hotels that actively target this market.

Many of the city's hotels have successfully boosted their UK leisure break

and overseas tourist business through the use of OTAs.

A number of hotels reported an increase in demand from Chinese tourists

booking mainly through booking.com.

A number of hotels reported a downturn in the US tourist market but a

growth in demand from Australia and New Zealand.

3.6 Denied Business1

3.6.1. The key findings of our research regarding the levels of business that Bath hotels are

currently denying are as follows:

5 star, 4 star, boutique and 3 star hotels only consistently deny business on

Saturday nights. Friday night denials are much less frequent and midweek

denials rare. While hotels can achieve high occupancies on these nights

during the summer they do not generally fill. This appears to be largely

because they hold out to maximise the room rates that they can achieve.

Bath's budget hotels consistently deny significant business both during the

week and at weekends. Budget hotels are the only hotels that consistently

turn midweek business away. Saturday denials are very high and Friday

turndowns are also significant. Midweek denials are frequent and significant

for two of the city's budget hotels but less common and lower for the other

two.

1 Business that hotels have to turn away because they are fully booked


________________________________________________________________________________________


Some of Bath's hotels reported that they are typically turning away 2-3

enquiries per week for residential conferences that they do not have the

conference facilities to accommodate.

Bath hotels are generally closed out to group tours as this business is too low-

rated for them when they can achieve high occupancies from other

higher-rated leisure markets. Group tours typically stay in Swindon and

possibly Bristol hotels and commute into Bath for the day.

Our research suggests that there is significant lower-rated leisure demand

for hotel stays in Bath that is currently prevented from coming to Bath

because of the high hotel prices in the city. It seems likely that some of this

demand is being picked up by hotels in the surrounding area, whose leisure

guests then commute into the city as day visitors. We know from work that

we undertook in Wiltshire in 2014 that this is certainly the case for hotels in

Bradford-on-Avon, Trowbridge, Melksham, Corsham and Chippenham. We

suspect that people also stay in Bristol to visit Bath. Some of this demand

may also be going to competing destinations such as Oxford, Cheltenham,

Salisbury, Winchester, where there is a greater choice of more affordable

hotel accommodation.

3.7. Prospects beyond 2015

3.7.1. The city's full service 5 star, 4 star and boutique hotels expect to see further

occupancy and rate growth in 2016 but some are concerned about their

prospects once the Apex and Indigo hotels open. The general view is that these

new hotels will dilute the midweek market, probably resulting in lower midweek

occupancies and reduced room rates, depending on the rate strategies that they

adopt.

3.7.2. The city's budget hotels are all confident they can continue to achieve high room

occupancies and steadily increase their average room rates. None of them see

any major threat from the Z Hotel.


________________________________________________________________________________________


3.7.3. The key markets that Bath hotel managers and owners see as offering growth

potential going forward are:

UK leisure breaks;

Overseas tourists - in particular the Chinese, Russia and US markets;

Residential conferences - for those hotels that have good conference

facilities.

3.7.4. A number of hotel managers and owners identified a need for a much clearer

forward vision for the development of Bath's visitor offer and a clear marketing

strategy for driving midweek staying visits to the city as key prerequisites for

maintaining the viability of the city's existing hotels and supporting new hotel

development.

3.8. Growth in Hotel Demand 2008-2015

3.8.1. The table below summarises how the Bath hotel market has grown since 2008,

through a comparison of the results of the 2009 Visitor Accommodation Study

completed by The Tourism Company and the findings of this Hotel Futures study.

Table13

BATH - GROWTH IN HOTEL DEMAND 2008-2015

Year Total Hotel

Supply

(Rooms)

Av. Annual Room

Occupancy

(All Hotels)

%

Total Satisfied

Roomnight

Demand

% Increase in

Roomnights

2008-2015

%

2008 1343 751 367,646

2015 14922 83 452,001 + 23%

Notes:

1. Source: Bath & North East Somerset Visitor Accommodation Study, The

Tourism Company, December 2009

2. Excluding Gainsborough Bath Spa

3.8.2. In terms of total roomnight demand the Bath hotel market has grown by 23%

between 2008 and 2015, driven by both an increase in hotel supply and an

improvement in occupancy performance. This equates to an average annual

growth rate of 3.3% over the last 7 years.


________________________________________________________________________________________


4. STRATEGIC CONTEXT AND DRIVERS OF GROWTH

______________________________________________________________________________________

4.1. The Context for Future Growth in the Bath Hotel Market

4.1.1. This section looks at a range of factors that shape the environment and dynamics

for further hotel development in Bath. First it considers the overall economic

context and outlook within Bath and the wider region. It then focuses on tourism,

looking at national and local trends and the tourism strategy for Bath. Finally, it

considers more area specific matters, looking at the planning context for hotel

development and at key projects in and around the city which could be drivers for

growth.

4.2 The Sub-Regional Strategy for Growth

4.2.1. Bath forms part of the West of England. This sub-region links Bath with Bristol and the

surrounding area, forming one of eight core city regions in England which are

assuming an increasingly high profile politically and economically. The

performance of the sub-regional economy and the way this is supported and

promoted has significant implications for Bath.

4.2.2. The West of England has been, and will continue to be, one of the fastest growing

areas in Europe. With a population of just over one million, its economy is worth

some £25.5 billion per year. The sub-region has 7 Enterprise Areas/Zones, with just

one of them in Bath (Riverside).

4.2.3. A Strategic Economic Plan (SEP) 2015-30 has been produced by the West of

England Local Enterprise Partnership. The plan’s targets are for the provision of a

further 65,000 jobs by 2030, and a GVA growth of 2.6% per annum. The plan has

identified five priority sectors: advanced engineering/aerospace; professional

services; creative and digital; high tech; and low carbon. Two of these

(creative/digital and high tech) are particularly identified as opportunities for Bath.


________________________________________________________________________________________


4.2.4. More specifically, the plan identifies 34 interventions to be supported. A number of

these are generic and should assist growth in Bath, including investment in

broadband, resource efficiency, cultural infrastructure, housing, skills development,

innovation and investment promotion. Three of the site-specific interventions are

located in Bath: West of England Centre of Power and Energy (University of Bath);

Craneworks project (South Quays); and Bath Innovation Project (Innovation

Campus and Quay).

4.2.5. The plan identifies and supports a range of projects for improving transport to and

within the sub-region. The ongoing expansion of Bristol Airport is seen as a strategic

opportunity.

4.2.6. The visitor economy is not targeted per se as a priority sector in the plan. However,

there is strong recognition of its importance as a cross-cutting sector that supports

and benefits from economic growth in other sectors.

4.2.7. The implications of the sub-regional economic position and the SEP for hotel

development in Bath include:

Dynamic growth of the city-region. The SEP portrays a strong sense of

confidence and opportunity. The size, diversity and total growth potential of

the economy of the sub-region is far greater than would be achievable by

Bath on its own. This will further fuel local demand.

Implications for the destination brand. The SEP recognises the world class

cultural heritage of the area as a key strength, with spin off economic

benefits. Equally, the SEP places great emphasis on innovation, creativity

and design as an existing strength of the area which presents a strong

opportunity for growth. The sense of direction is towards a high quality city

region that manages to combine these two assets – i.e. exceptional culture,

style and creativity linking the past through to the present and into the

future. The SEP refers to appealing to “creative workers and affluent visitors”.

This has implications for the future Bristol/Bath brand, with consequences for

future markets and the positioning and style of hotels.


________________________________________________________________________________________


Opportunities for new investment in leisure and conference facilities and

events. This needs to be considered from a regional perspective. For

instance, the SEP identifies a lack of international level sport and concert

venues in the whole area, which will be partly addressed by the Bristol Arena

project (capacity 12,000).

Linking supply/demand between Bath and Bristol. Significant growth in the

local economy as a whole, together with strengthening transport and other

links between Bristol and Bath, could lead to more opportunities for Bath

hotels to service Bristol generated demand, but also vice versa. Bath could

benefit from more corporate demand generated by Bristol, which contains

five of the West of England’s Enterprise Areas/Zones and many of the site-

specific projects identified in the SEP. However, the SEP also identifies an

ongoing programme of hotel development in Bristol itself.

4.3. Economic Performance and Outlook in Bath

4.3.1. The city of Bath has a population of around 90,000. This compares with a

population of the whole of the B&NES local authority area of 177,600 (2012 figure).

Projections by ONS suggest a population growth for B&NES of 12.1% over the next

25 years. This is significantly lower than the projection for Bristol (22.1%) and for the

sub-region as a whole (20.2%). This differentiation in population growth further

emphasises the importance of the sub-region in generating demand within Bath.

4.3.2. In 2011, the B&NES economy produced an estimated £3.8 billion of GVA output

with total workplace employment of almost 92,000,

4.3.3. Economic performance in B&NES was significantly hit by the global downturn, with

workplace employment in the area falling by 3% between 2007 and 2013. This

compares with a more buoyant performance in the sub-region as a whole, which

saw an increase in workplace employment of around 4% over the same period.

The reason for the greater downturn in Bath is partly explained by the over-

dependency on public sector employment in the city. Since 2012 there has been a

return to growth.


________________________________________________________________________________________


4.3.4. The Economic Strategy for B&NES (updated 2014) presents a confident outlook. It

sets a target of 16,900 new jobs to be created by 2030, with a projected growth in

GVA per annum of 3.2%. These targets for jobs and GVA suggest a rate of growth

that is relatively higher than for the sub-region as a whole.

4.3.5. The Strategy identifies eight priority sectors. Four of these are identified on account

of their potential to deliver high value growth, with an emphasis on the knowledge

economy, including creative and digital sectors. The other four are identified on

account of their existing importance in the city, while also exhibiting growth

potential. These include retail, professional services, health/wellbeing and

tourism/leisure/ arts/culture. The importance of the visitor economy, in providing

25% of employment and £315m GVA annually, is recognised.

4.3.6. A particular theme of the Economic Strategy is the opportunity to further develop

Bath’s position as an international visitor destination, with an emphasis on achieving

a higher proportion of overnight visitors.

4.3.7. The strategy draws attention to a number of relevant issues and opportunities,

including:

The lack of business space in the city as a barrier to growth, underlining the

need for careful site selection and recognition of competing demands on

land and buildings

Proposals for strengthening connectivity in Bath, including broadband

development and the metro link to Bristol

Developing the arts and cultural themes, including a coordinated plan for

events.


________________________________________________________________________________________


4.4. National Tourism Trends

4.4.1. In 2013 spending by domestic tourists staying overnight in England was £18.7 billion,

with a similar amount (18.4 billion) spent by inbound visitors.

4.4.2. Tourism spending in England was relatively static between 2006 and 2010 but then

saw reasonable growth to 2013. However, the actual number of trips and nights

has seen little growth over the period as a whole, with a downturn during the

economic crisis followed by recovery. There has been some difference in

performance between domestic tourism (which grew strongly between 2010 and

2012, followed by decline) and inbound tourism (which saw strong growth between

2012 and 2013).

4.4.3. Within the overnight domestic market, over half of all spending (57%) is on holiday

trips, with business tourism accounting for 22% and visits to friends and relatives for

21%. Business tourism was most severely hit by the downturn and has been slower to

recover than holiday tourism.

4.4.4. Looking at different types of destination, large cities and towns as a group have

tended to performed above the national average.

4.4.5. Provisional figures for 2014 point to a significant decline in domestic trips, nights and

spending within England, affecting both holiday and business travel. However,

despite a decline of around 8% in the total number of nights compared with 2013,

nights spent actually in hotels appear to have only declined slightly (from 71.6 to

71.2 million).

4.4.6. By contrast, inbound tourism has continued to see growth in 2014, with nights up by

7%. Greatest growth in inbound tourism has been in London (nights up 10%)

compared with the rest of England (up 5%).

4.4.7. VisitEngland has set a growth target of a 5% increase in tourism spending per

annum between 2010 and 2020. The target had been achieved on average

between 2010 and 2012 but not in 2013 and 2014. Following a recent review of

performance it appears that VisitEngland will maintain this 5% headline target in the

short term. However, this has not been expressed in any predictions for growth in

trips or nights, nor has it been broken down between different types of market.


________________________________________________________________________________________


4.4.8. Independent forecasts for tourism growth in the medium term are favourable.

Research undertaken by Deloitte and Oxford Economics for VisitBritain in 20131

projects an average annual growth in domestic tourism in the UK of 3% and a 6%

per annum growth in inbound tourism .

4.4.9. A number of factors affecting future tourism trends over the next five to ten years

have been articulated by VisitEngland and others. Those most relevant to hotel

demand in Bath include the following:

Ongoing growth in inbound tourism - with the greatest volumetric growth

occurring in traditional markets including the USA and Western Europe but

the fastest relative growth from China and other emerging markets.

Maintenance of the pull of London as a key draw for overseas tourists -

providing opportunities for destinations in reach of the capital - including

Bath.

o An ageing UK population – the percentage of the UK population over 65 is

increasing. This generation is a powerful and growing economic force, with

sufficient time and disposable income to enjoy short breaks and regular

holidays. It offers particular scope for midweek visiting. The increase in the

number of elderly people in the UK population is also driving growth in the

group tour market.

o Stronger demand for short breaks - society has become increasingly time

poor with shifting patterns of holiday taking to higher frequency short breaks,

with many people now taking multiple short breaks rather than one main

holiday.

o The growing Generation Y market - people born in the 1980s and 1990s are

now starting to travel independently from their parents. This new generation

of hotel guest is looking for a different experience from a hotel stay, with a

greater importance placed on distinctive design, a relaxed atmosphere

and a high level of technology and connectivity.

1 Tourism Jobs and Growth: The Economic Contribution of the Tourism Economy to the UK,

Deloitte/Oxford Economics, November 2013.


________________________________________________________________________________________


o Online booking and marketing - consumers are increasingly booking hotel

accommodation through the growing number of third party websites that

offer discounted accommodation and holidays such as LateRooms,

lastminute.com, booking.com, Expedia, Trivago, and hotels.com, and taking

advantage of special offers promoted through daily deals sites such as

Groupon, Wowcher, Living Social, Travelzoo and Secret Escapes. Hotels are

also increasingly using e-marketing and social media channels to reach

customers. This is resulting in an increasingly deal-driven and competitive

market but enables hotels to affordably reach millions of potential

customers both in the UK and overseas and allows hotels to proactively

market their available inventory, albeit often at reduced rates. The growth

of customer review sites, in particular Tripadvisor, is making it ever more

important for hotels to deliver excellent standards of service and facilities to

ensure that they achieve favourable reviews and high rankings.

Maintenance of a strong VFR and functions market - providing a stable or

increasing demand for hotel accommodation and associated facilities in

line with population growth.

Further growth in health and wellness tourism - in particular spa breaks.

4.5. The Characteristics of Tourism in Bath

4.5.1. This sub-section contains general information on tourism in Bath. More specific

evidence on hotel performance, occupancy and markets is contained elsewhere

in the report.

4.5.2. Information on tourism flows and spend in Bath is available from annual reports1

prepared for Bath Tourism Plus. These are primarily based on disaggregation of the

national surveys including the Great Britain Tourism Survey and the International

Passenger Survey.

1 The Economic Impact of Bath and North East Somerset’s Visitor Economy 2013,

The South West Research Company Ltd


________________________________________________________________________________________


4.5.3. The dimensions of domestic and overseas tourism to B&NES are shown in Tables 3.1

and 3.2 below.

Table 14

DOMESTIC TOURISM IN B&NES -2013

All Holiday/

Break

Business VFR Other

Trips (‘000) 684 415 129 126 14

Nights (‘000) 1733 1119 278 309 27

Spend (£m) 124 79.8 31.6 10.7 1.8

Source: SWRC, 20141

Table 15

OVERSEAS TOURISM IN B&NES - 2013

All Holiday/

Break

Business VFR Other Study

Trips (‘000) 283 193 38 44 4 3

Nights (‘000) 1346 722 126 317 53 128

Spend (£m) 94 55.4 15.5 13.8 3.4 5.8

Source: SWRC, 20141

4.5.4. Although the bases for the domestic and international figures are not strictly

comparable, the figures suggest that in 2013 over half (56%) of the tourism nights

and of the spend in Bath was from domestic visitors, with around 44% from overseas

visitors.

4.5.5. Both tables underline the importance of holidays and short breaks as generators of

the majority of nights in Bath. By contrast, business tourism accounts for just

16% of domestic and 9% of overseas nights.

4.5.6. The origin of overseas tourism to Bath has not changed significantly in recent years.

In 2014 the USA was the most significant market (estimated 34k staying visits),

followed by Germany (29k), France (23k), Australia (23k), Spain (21k) and Ireland

(15k). Emerging markets are still a much smaller source – China was estimated at 1k

in 2014 (6k in 2013). The above are very approximate estimates disaggregated from

the International Passenger Survey.

4.5.7. The most important source regions for the domestic overnight market are Greater

London, South East England and South West England.


________________________________________________________________________________________


4.5.8. Trend data is available on an annual basis for all tourism, although the figures need

to be treated with caution. Domestic nights saw growth up to 2006, followed by a

significant decline to 2009. By 2012 nights had grown back to above to 2006 levels

but there has been some decline since then. Overseas nights have also seen

significant fluctuation during this period, but saw growth in 2013.

4.6. Market and Consumer Response Data

4.6.1. The Bath Visitor Survey 2014 provides some up to date information on visitor profile

and perceptions. Some findings relevant to understanding the market for hotels

include:

83% of overnights spent were in serviced accommodation.

Average length of stay by visitors staying overnight in Bath was 2.47 nights.

Average spend per person staying overnight was £114 per 24 hours, of

which £45 was spent on accommodation and £31 on eating out.

As well as enjoying the attractions of the city itself, a high proportion of

visitors are also touring in the local area and going for walks in the

countryside, suggesting that Bath accommodation should also serve as a

base for such activity and be suitably accessible.

The age profile of visitors is reasonably well spread, although slightly skewed

towards a seniors market (36% of those surveyed were 55 or older).

Satisfaction levels are high, including for accommodation. Quality of

accommodation scores slightly higher than value for money, although

perceptions of the latter have improved over the last ten years.

4.6.2. Further evidence on the performance of Bath as a tourism destination, taken from a

consumer perspective, is available from the VisitEngland Visitor Satisfaction Survey

(TRIM). Data for 2012 shows that, from a set of 29 attributes, Bath is relatively strong

in terms of its heritage buildings, environment, shopping, catering, attractions and

welcome. However, its relatively weaker points include value for money (including

specifically accommodation that offers value for money) transport, events, nightlife

and cost of parking.


________________________________________________________________________________________


4.7. Conference Tourism Performance in Bath

4.7.1. Evidence on the local conference market is available from a report1 prepared for

Bath Tourism Plus, based on a limited sample of venues. Key results relevant to hotel

demand from this market include the following:

In 2013 there were an estimated 3310 business events at venues

located in Bath, which is slightly down on the 2011 estimate

(3750), but numbers of delegates and spend were up.

Average length of event was 1.9 days, and tended to be

longer in city centre hotels than in venues in the surrounding

area.

The average number of events held per hotel in Bath was 158.

55% of events held in Bath hotels were not overnight, with 36%

involving stays in the hotel itself and 9% involving stays

elsewhere. This is a greater proportion of overnight staying than

was found in 2011.

60% of events in Bath hotels were Corporate, 26% Association

and 14% Public Sector. 46% involved the use of a professional

conference organiser.

Event size in Bath hotels tended to be relatively small, with an

average size of 40 delegates. Only 23% of events involved over

50 delegates and 3% over 100 delegates. Events in non-hotel

venues tended to be bigger.

Average delegate rates for Bath hotels were £169 (24 hour

rate) and £44 (day rate).

1 The Impact of Conference Tourism in Bath, 2013 Team Tourism


________________________________________________________________________________________


4.8. Bath Tourism Policies

4.8.1. The Destination Management Plan for Bath1 was completed in 2007 and is likely to

be renewed in due course. The plan concluded that tourism in Bath was in good

shape but could do better. Among the weaknesses identified was a lack of

accommodation capacity that inhibits growth. The plan sought to aim high,

promoting Bath as a special place, but with an approach based on refreshing the

offer rather than a dramatic change. The need to strengthen links with the

surrounding area, to add depth to the offer, was recognised. Emphasis was placed

on increasing value, including length of stay, as a priority over increasing volume.

4.8.2. Four themes behind the plan covered: marketing and communication; the tourism

product; infrastructure and environment; and management and leadership.

Specific actions included, amongst many others: making more of events; creating

a new venue for conferences and cultural events; increasing hotel

accommodation in the city; and improving the look and feel of the city centre and

circulation within it. Varied progress has been made in these areas, including in the

field of accommodation and amenity improvement, while it is recognised that

more could be done with regard to venue provision and capitalising on events.

4.8.3. The strategy set quite modest growth targets for 2007-16, for a 10% increase in visits

and a 15% increase in nights in this period. To date it appears2 that the visits target

will broadly be met but the nights target may not – there has been no clear growth

in average length of stay.

1 Bath and North East Somerset Destination Management Plan. The Tourism Company, 2007 2 The results vary significantly according to which year is chosen as the start and end date.


________________________________________________________________________________________


4.8.4. A Visitor Accommodation Study was completed in December 2009, as an action

arising from the DMP. It was based on extensive consultation with providers and

local businesses. The study concluded that there was scope for adding 256-376

rooms by 2016 and 444-761 rooms by 2026. The development mix proposed was as

follows:

A new 3 or 4 star branded hotel with a preference for a 4 star international

brand if it can help secure or support significantly enhanced conference

facilities.

Attracting two or more boutique hotels.

Some modest expansion of budget chain provision which diversifies the

existing budget offer.

4.8.5. In addition it was proposed that the Council should:

Seek to maintain a viable guest accommodation sector. The impact of new

hotel development on this sector should be monitored and policies

reviewed accordingly.

Encourage some modest expansion of self-catering and hostel

accommodation.

Prioritise the search for ways to create a conference facility to boost

business tourism midweek,

Review car parking policy and provisions for hotels

Consider the potential for the inclusion of visitor accommodation land uses

into employment land use policies.

4.8.6. With Bath's hotel supply set to increase by 630 bedrooms by 2017, the hotel

expansion envisaged by 2026 will largely have been met by this year, other than

under the high growth scenario.


________________________________________________________________________________________


4.8.7. The Destination Marketing Strategy for B&NES 2012-14 does not directly relate to

hotel development. However, by containing a more up-to-date assessment and

approach to markets it provides important context. The approach is to seek to

increase the proportion of overnights amongst visits to Bath. Amongst overnight

visitor markets, the priority targets are identified as follows:

Couples aged 25-35, ABC1 SINKS/DINKS, London/SE – for city

breaks

Couples aged 45-65, ABC1 Empty Nesters, London/SE – city

breaks plus

Niche segments – cultural experiences; extended families;

female groups.

Visitors to Friends and Relatives – seen mainly as day visitors but

demand for commercial overnights should be recognised (e.g.

from Universities)

North America – ideal fit to Bath offer

Germany – city and culture, but also surrounding countryside

France – owing to market size and spend

China – as an opportunity for the future, capitalising on

heritage and shopping

UK Residential events: Incentive, Corporate, Public and

Associations (esp. London/SE, Midlands)

International incentive travel events – focus on USA and

Germany.

4.8.8. The Strategy sets out a number of marketing priorities and tactical activity covering:

brand communication; marketing framework and delivery partnerships; best

practice and innovation (especially in the digital sphere); delivering a word class

experience; and market intelligence. In general, the approach is more focussed

on promotion than product, although there is an emphasis on generating year

round visits using events and festivals as a stimulus.

4.8.9. The Economic Strategy, 2014 (see sub-section 3.2 above) calls for a revised DMP

and Marketing Strategy. It recognises the importance of investment in the city


________________________________________________________________________________________


centre facilities and public realm. It also identifies the need for a year round

festivals and events programme. Within the sub-regional context, the Strategic

Economic Plan (SEP) 2015-30 (also see 3.2 above) has a Sector Prospectus with a

short section on tourism. This identifies a number of relevant opportunities, including:

casino licence in Bath; closer collaboration between Bristol and Bath in

international markets; Bath’s positioning as a centre for wellness; the current three-

year Bristol and Bath Cultural Destinations project; and further infrastructure

development to enhance Bath’s position as a World Heritage Site and European

Spa Resort.

4.9. Planning Policies Relevant to Hotel Development

The Core Strategy

4.9.1. The Core Strategy (Part 1 of the Local Plan) was adopted in July 2014. It sets out a

vision for Bath to 2029: “Bath's natural, historic and cultural assets, which combine to

create a unique sense of place of international significance, will be secured and

enhanced to maintain the city's key competitive advantage and unique selling

point as a high quality environment, to live, grow a business, visit and invest”.

4.9.2. The Strategy provides some quantification of planned for economic development:

This includes:

An overall net increase in jobs of 7,000, rising from 60,200 in 2011 to

67,200 in 2029, with significant gains in business services tempered by

losses in defence and manufacturing.

The expansion of knowledge intensive and creative employment sectors

by enabling the stock of office premises to increase from about 173,000

m2 in 2011 to about 213,000m2 in 2029.

Net additional increase to the stock of office premises of 40,000 m2 by

enabling the development of 50,000 m2 of new space, linked to a

managed release of 10,000m2 of that which is qualitatively least suitable

for continued occupation.

Focus new office development within and adjoining the city centre and

enable appropriate levels of business space in mixed use out-of-centre

development sites.

A contraction in the demand of industrial floor space from about

167,000m2 in 2011 to about 127,000m2 in 2029 but sustain a mixed

economy to support Bath's multi-skilled workforce and multi-faceted


________________________________________________________________________________________


economic base by retaining a presumption of favour of industrial land in

the Newbridge Riverside area.

4.9.3. Within Bath itself, the two main spatial areas of relevance, that are treated

separately, are the Central Area and Western Riverside.

Central Area

Key development opportunities identified include:

City Centre

North of Pulteney Bridge (Cornmarket, Cattlemarket, Hilton Hotel, and The

Podium).

Manvers Street Car Park, Avon & Somerset Police Station and Royal Mail

Depot area.

Green Park Road (Green Park House).

Bath Quays North (Avon Street Car and Coach Park and City College).

Kingsmead (Kingsmead House, Telephone Exchange, Plymouth House and

land in the vicinity of Kingsmead Square).

Neighbouring the City Centre

Bath Quays South (Stothert and Pitt to Travis Perkins).

The Green Park Station area.

The Homebase area including the Pinesway industrial estate and gyratory.

The key activities to be accommodated within the Central Area include:

Small to medium sized comparison retail development where this retains a

compact and continuous primary shopping area.

A net increase of about 40,000 sq m of modern office and creative

workspace, to enable the growth of sectors targeted in the Economic

Strategy.


________________________________________________________________________________________


2,000 sq m of convenience shopping space to address the overtrading of

existing stores.

Manage the delivery of 500-750 hotel bedrooms to widen the

accommodation offer of the city, increase overnight stays and the

competitiveness of the city as a popular visitor destination.

About 500 additional dwellings as part of mixed use schemes on the key

redevelopment opportunities that have been identified.

A rejuvenated public transport interchange including improvements to Bath

Spa Rail Station.

A comprehensive programme for public realm enhancement and

implementation of a Wayfinding and City Information System.

Existing uses within the Central Area that remain compatible with its future

role and the scope and scale of change envisaged for it, should, where

appropriate, be reincorporated as part of redevelopment proposals, unless

this is not viable or would significantly reduce the capacity of the Central

Area to accommodate jobs or housing development. In such

circumstances reasonable efforts should be made to ensure such uses are

relocated elsewhere.

A cultural / performance / arts venue.

The retention and enhancement of leisure facilities.

Major riverside access and habitat enhancements.

Western Riverside Area

The Western Riverside Area was formerly occupied by the Stothert and Pitt

engineering company and adjoining land has been earmarked for a major

programme of residential led regeneration for a number of years. Western Riverside

is allocated for residential led development in Policy GDS.1/B1 of the Bath and

North East Somerset Local Plan (October, 2007). This policy is supported by a Master

Plan Supplementary Planning Document (March, 2008). This is a complex site but

significant planning progress has been made with the delivery of phase I

commencing in December 2010.

4.9.4. In the thematic area of Tourism, Culture and Sport, the Strategy includes the

following policies:


________________________________________________________________________________________


Manage the provision of 500-750 new hotel bedrooms to widen the

accommodation offer for the city, increase overnight stays and the

competitiveness of the Bath as a visitor and business destination.

At the Recreation Ground, and subject to the resolution of any unique legal

issues and constraints, enable the development of a sporting, cultural and

leisure stadium.

Enable the provision of enhanced facilities for interpretation of the World

Heritage Site in the Central Area and for the City Archives.

Enable the provision for a new cultural/ performance/arts venue within the

Central Area.

The Placemaking Plan Options Document

4.9.5. The Placemaking Plan (Part 2 of the Local Plan) focuses more on the specifics,

including detailed design principles and development aspirations and updating

the planning policies used in determining planning applications. The Options

Document (November 2014) is in two sections: Development Sites; and

Development Management Policies.

4.9.6. The Plan describes 15 Development Sites in the Central Area and River Corridor.

Three Options are proposed, showing different potential uses across these sites.

Uses are categorised as: Office, Food Retail, Comp Retail, Housing, Hotel, Civic,

and Industrial. Sites with hotels forming part of one or more options include:

Cattlemarket, Manvers Street, Bath Quays North, Kingsmead, Premier Inn,

Gainsborough, and Sawclose. Some of these have already seen hotels

developed or approved. Additional sites have recent planning history with respect

to hotel proposals – e.g. Brougham Hayes. Development and design principles are

set out for each site.

4.9.7. Development site options and treatments are also considered with respect to the

former Ministry of Defence land, the Universities of Bath and Bath Spa, the Royal

United Hospital, and local green space in Bath. Hotel development is not

specifically identified with respect to these sites.

4.9.8. Development Management Policies make some reference to hotel development,

for instance in relation to change of use from residential or office to hotel, which will

only be permitted in certain circumstances (where the office building is of a poor


________________________________________________________________________________________


quality and has been marketed for sale for 12 months on reasonable terms without

success.

4.9.9. Hotel development in the central area which would entail loss of office space will

need to meet particular conditions if it is to be approved. These include the

ongoing suitability for offices, the achievement of levels of employment equivalent

to that lost from office use, or the provision of other overall benefits for the city that

outweigh the loss.

Enterprise Area Masterplan

4.9.10. Bath City Riverside Enterprise Area Masterplan 2014-2029 identifies opportunities

and provides guidance for development in the river corridor. The EA will be the

focus for new development in Bath during this period, with potential to

accommodate up to 9,000 new jobs and 3,400 homes. It includes 98 hectares of

land along the river corridor in central and western Bath, some 36 hectares of

which is developable brownfield land.

4.9.11. The Masterplan is visionary and conceptual as well as site specific. It proposes a

varied mixed use including industrial sites, workspace (with an emphasis on creative

uses), conservation of natural, historic and industrial heritage, and a variety of

leisure uses. Some reference is made to hotel development.

4.9.1.2 More detailed work relating to the Masterplan has identified specific hotel

opportunities at North Quays, Manvers Street and the Cattlemarket providing,

respectively 222, 175 and 59 jobs.


___________________________________________________________________________________________________________________________________________


49

BATH CITY RIVERSIDE – ENTERPRISE AREA MASTERPLAN – KEY SITES


________________________________________________________________________________________


4.10. Key Projects Affecting Hotel Demand

4.10.1. Evidence from current policies and plans, together with other information provided,

suggest that a number of specific projects and initiatives that may be key drivers for

further hotel demand in Bath.

Economic Development and Investment Projects

4.10.2. The main driver will be the staged investment taking place within the Enterprise

Area. A forecast of jobs created and when these will come on stream has been

undertaken as part of the Masterplan exercise. This shows cumulative totals of

around 2,600 jobs being created by 2020, 9,800 by 2025, 11,600 by 2030 and 12,700

by 2035.

4.10.3. The job growth will be phased as various parts of the overall EA come on stream,

starting with the Cattlemarket and South Quays, followed by North Quays and

Green Park West, then Manvers Street, Green Park East and finally South Bank.

University Development and Activity

4.10.4. The two Universities in Bath are significant generators of economic activity and are

likely to play an increasingly important role in the future. They are drivers of a range

of demand for hotel accommodation, for related business activity, conferences,

visiting families and other purposes.

4.10.5. The University of Bath Masterplan 2009-2020 forecasts student growth averaging

between one and three percent per year. More significantly, the plan outlines a

major development programme for the University, with an increase in floorspace of

almost 50% for academic and related activities and an doubling of residential

accommodation on campus.

4.10.6. Bath Spa University has a programme to attract more international students, with a

particular focus on the US in the short term. It also has significant redevelopment

plans for its sites in the period up to 2030, including provision of new academic and

residential space.


________________________________________________________________________________________


Transport and Infrastructure Improvement

4.10.7. The electrification of the Great Western Main Line, due for completion in 2017, will

further improve accessibility from London. Further development of the Metro

services will facilitate links between Bristol and Bath and other travel within the sub-

region.

Leisure and Cultural Initiatives

4.10.8. A number of specific projects or proposals to strengthen the facilities and project

offer in the leisure and cultural field could have an effect on accommodation

demand in the medium to long term. In each case their status and likelihood of

implementation needs to be confirmed:

Bath Recreation Ground – redevelopment as a new stadium for sport and

leisure events.

Proposals for a new cultural and arts venue in Bath (identified in the Core

Strategy).

Bristol Arena Project, with a capacity of 12,000.

Reference to a forthcoming new attraction in the Bath area which will be

of promotional value.

4.10.9. The programme of events in Bath is expanding. Both the current economic

strategy and the marketing plan emphasise the potential to make more of festivals

and coordinated events as a basis for growing the visitor economy.

4.10.10.A joint project between Bristol and Bath has been funded by Arts Council England

and VisitEngland as part of the Cultural Destinations programme. Due to finish in

2017, this is focussing on ways to gain more value for both cities from a more

integrated approach to arts and culture, with new joint initiatives and structures to

take this forward.


________________________________________________________________________________________


4.11. Conclusions

4.11.1. The following overall conclusions for future hotel demand can be drawn from this

assessment of strategic context and drivers of growth.

Sub-regional and local economic and tourism policies, and spatial and land

use planning frameworks, provide a strong basis for economic growth and

the development of Bath's visitor economy, presenting a confident

environment for further hotel development.

National forecasts for domestic tourism show significant growth in markets

for which Bath has a comparative advantage. Recent national

performance would point to the need for caution however. The additional

boost provided by an even stronger forecasted growth in overseas tourism

will be important in securing new tourist stays in Bath, including opportunities

to capitalise on growth in incoming tourism to London.

Future hotel investment in Bath should be seen partly in the context of the

West of England sub-region, with its strongly growing, dynamic and diverse

economy, including opportunities for a coordinated tourism offer. This should

create further demand for hotel accommodation in Bath beyond that

which is based purely on the development of the single city.

Within Bath, planned significant growth in the economy and jobs, improved

transport infrastructure and the positive environment provided by the

Universities are all strong drivers for growth. The Riverside EA provides a

particular catalyst, both in terms of supply and demand. Hotel

development should partly reflect the pattern of staged development of

the EA over the next 20 years and beyond.

Proposals for new leisure facilities and attractions and an enhanced events

programme should lead to important additional future demand, but the

level, nature and timing of these initiatives are unclear.


__________________________________________________________________________________________


5. FUTURE POTENTIAL FOR HOTEL DEVELOPMENT

__________________________________________________________________________________________

5.1 Understanding The Requirements and Potential for New

Hotel Supply

5.1.1. With hotel performance in Bath being so strong and the prospects for future growth

in the city's key staying visitor markets looking very positive, it is clear that there will

be scope for additional hotel provision in Bath over the next 15 years. The challenge

is to understand the quantum of new hotel supply that will be needed to meet future

growth requirements and potential, at the same time as maintaining a healthy and

thriving hotel sector that is not undermined by oversupply. There are two ways of

looking at this:

a) An assessment of how Bath's hotel stock will need to develop to achieve

targets for growth in staying tourism.

b) Modelling how demand for hotel accommodation could grow and the

level of new hotel provision that such growth would support, whilst still

allowing existing hotels to trade at current levels.

Hotel Supply Requirements to Meet Growth Targets

5.1.2. While there is no current destination management plan or destination marketing

strategy for Bath, it is reasonable to assume that future plans and strategies will focus

on growing staying tourism volume as a priority, to help support the city's evening

economy and reduce day visitor numbers. With most hotels in Bath trading at, or close

to capacity for much of the year it is clear that future growth in staying tourism in Bath

will need to be largely supply-led. It is useful to consider therefore what a future target

for growth in staying tourism in Bath would mean in terms of requirements for

additional hotel provision to achieve it.


__________________________________________________________________________________________


5.1.3. In the absence of a current target for growth in staying tourism in Bath we have

assumed a target of 5% p.a. in volume through to 2030. This is in line with Visit England's

national target for tourism growth and the target for growth in nights spent in the city

in the 2012-2014 Destination Marketing Strategy for Bath & North East Somerset.

Using this growth rate we have calculated the target future roomnight demand for

hotel accommodation in Bath for each year through until 2030. We have then

worked out how many hotel bedrooms these roomnight figures will support

assuming that all hotels (existing and new) achieve an average annual room

occupancy of 80%. Comparing the results of these calculations to the current

baseline supply of hotel bedrooms in the city gives figures for the numbers of

additional hotel bedrooms that will be needed to achieve the growth target of 5%

p.a.. The results of these calculations are set out in the table below.

Table 16

BATH - REQUIREMENTS FOR ADDITIONAL HOTEL SUPPLY TO ACHIEVE AN ANNUAL

TARGET OF 5% GROWTH IN STAYING TOURISM VOLUME

YEAR NEW HOTEL

ROOMS REQUIRED

PIPELINE NEW

HOTEL ROOMS

2020 436 478

2025 969 478

2030 1649 478

Source: Hotel Solutions

Notes:

1. Gainsborough Bath Spa, Apex, Hotel Indigo (net additional bedrooms),

Z Hotel

5.1.4. These results suggest that the pipeline hotel supply will be sufficient to meet the

requirement for additional hotel provision through until around 2020, after which time

additional new hotel bedrooms will be needed. Clearly if a lower growth target for

staying tourism is selected the requirement for additional hotel development will be

reduced.


__________________________________________________________________________________________


Hotel Demand Projections

5.1.5. The other was of trying to understand future requirements for additional hotel

provision in Bath is to model potential future growth in demand for hotel

accommodation in the city and then work out how many additional hotel

bedrooms such growth might support in the city without undermining the

performance of existing hotels. We have developed our Hotel Futures demand

forecasting model to do this. The model combines baseline data on hotel supply,

occupancy and denials with assumptions on potential future growth in hotel

demand based on other available forecasts and indicators of future market growth

and reflecting the need to ensure a viable future for existing hotels and avoid

excessive price competition as a result of oversupply. Any demand modelling

approach is a hypothetical one, based on assumptions. The results should therefore

be treated as indicative only and should be periodically reviewed and updated.

5.1.6. In order to provide an indication of the number of new hotel bedrooms that

might be needed in Bath through to 2030 as the city's hotel market grows, we

have prepared projections of possible future growth in hotel demand in Bath to

2020, 2025, and 2030, using our Hotel Futures demand forecasting model. Projections

have been prepared for upscale/ full service (5 star, 4 star and boutique hotels) and

budget/limited service hotels taking the current (July 2015)supply of hotels10 in the city

and forecast 2015 roomnight demand as the baselines for the projections.

There is an insufficient and reducing supply of 3 star hotels to enable us to run

projections at this level.

5.1.7. Given the strength of demand for hotel accommodation in Bath it is not unreasonable

to assume that all hotels, both existing and new, will continue to fill on Saturday nights

for most of the year and achieve high Friday night occupancies. New hotels are

however likely to result in a more competitive Sunday to Thursday hotel market in the

city, when existing hotels, certainly at the upscale/full service level are not currently

filling and turning business away. We have assumed therefore that new hotel provision

needs to be supported by growth in Sunday to Thursday demand and on the basis

that all hotels can achieve at least the current levels of Sunday to Thursday

occupancy. We have therefore run the growth projections purely on the basis of

growth in Sunday to Thursday demand.

10

Excluding the Gainsborough Bath Spa


__________________________________________________________________________________________


5.1.8. The growth projections are based on the following assumptions:

Upscale/full service hotels are not currently denying any Sunday to Thursday

business;

Sunday to Thursday denials for budget/limited service hotels are based on the

information provided by the managers of these hotels;

Sunday to Thursday demand for hotel accommodation in Bath will grow at

average annual Low, Medium and High growth rates of 3, 4 and 5 per cent11.

These growth rates assume that effective marketing and product

development strategies to grow Sunday to Thursday business will be

implemented by Bath Tourism Plus, Bath & North East Somerset Council and

individual hotels and hotel companies;

20% of the Sunday to Thursday occupancy achieved by the Gainsborough

Bath Spa, Apex and Indigo hotels will be new business generated by these

hotels because of their product, brand, marketing and central reservations;

All upscale/full service hotels will achieve a Sunday to Thursday occupancy of

70%;

All budget/limited service hotels will achieve a Sunday to Thursday occupancy

of 80%.

11

Our reference points for these assumed growth rates are as follows:

The national forecast for growth in domestic tourism of 3% p.a.

The national forecast for growth in inbound tourism of 6.1% p.a.

The average annual growth in hotel roomnight demand in Bath between 2008 and

2015 of 3.3%

Visit England's national target for tourism growth in England of 5% p.a.

The jobs growth target in the B&NES Economic Strategy of 1.05% p.a. and Core

Strategy provision for growth in office space equivalent to an average annual growth

rate of 1.28% - as proxy measures for potential growth in corporate demand

Growth is also likely in terms of contractor demand and some growth in residential

conference business and university-related demand. We have not been able to find any

suitable reference points for the potential growth in these markets however.

Our assumed growth rates for midweek demand for hotel accommodation in Bath are

intended to reflect the potential for growth in all markets - corporate, contractors,

residential conferences, university-related demand, UK leisure breaks, overseas tourists


__________________________________________________________________________________________


5.1.9. New hotels are likely to result in a more competitive hotel market in the city and could

possibly erode the average room rate performance of existing hotels. It is however

only possible to model potential future growth in demand by volume, not by value.

The assumptions that we have used, in terms of growth rates and the Sunday to

Thursday occupancy that hotels will achieve, are intended to reflect a scenario

where average room rate performance will not be unduly affected.

5.1.10. The results of our demand projections are set out in the table below.

Table 17

BATH - PROJECTED REQUIREMENTS FOR NEW HOTEL DEVELOPMENT – 2020-2030

STANDARD OF

HOTELS/YEAR

PROJECTED NEW ROOMS REQUIRED PIPELINE

ADDITIONAL

ROOMS LOW

GROWTH

MEDIUM

GROWTH

HIGH

GROWTH

Upscale/ Full Service (5 Star/ Boutique/ 4 Star)

2020 225 269 315 3301

2025 367 472 586 3301

2030 532 719 933 3301

Budget/Limited Service

2020 188 218 250 1482

2025 286 358 436 1482

2030 399 527 674 1482

TOTAL NEW HOTEL ROOMS

2020 413 487 565 478

2025 653 830 1022 478

2030 931 1246 1607 478

Source: Hotel Solutions

Notes:

1. Gainsborough Bath Spa, Apex, Hotel Indigo (net additional bedrooms)

2. Z Hotel


__________________________________________________________________________________________


5.1.11. These results show potential for a greater number of new hotel bedrooms in Bath

than was projected in the previous 2009 Visitor Accommodation Study prepared by

The Tourism Company for a number of reasons:

They take as their starting point a higher roomnight demand because:

o Hotel occupancies have increased significantly since 2008;

o The hotel supply has grown with the opening of the Premier Inn, with

only a marginal impact on some existing hotels. This hotel is trading very

well and has clearly brought substantial levels of new business to the

city and is already consistently denying significant demand.

The prospects for future growth in demand for hotel accommodation in the

city look much more positive in terms of:

o The strong growth projected nationally in the domestic leisure break

market and in inbound tourism: Bath should be a key beneficiary of

these trends;

o The likely growth in corporate demand given the plans for office

development in the city that are now moving ahead.

The pipeline hotels that are due to open in the city are likely to generate new

business because of their product, brand, customer base, national marketing,

central reservations, and potential for referral from sister hotels in London, Bath

or Bristol. We have factored this new demand into our projections.

5.1.12. We have also taken a different approach to modelling the potential future growth in

the city's hotel market, focused purely on midweek demand and assuming that all

hotels (existing and new) will maintain the current average midweek occupancy

levels. We feel that this is a more appropriate (and conservative ) approach as it

avoids overcompensating for the strengths of weekend demand in Bath and overly

diluting the midweek market for hotel accommodation in the city.

5.1.13. The projections indicate that there is a need to plan for further hotel expansion over

and above the level currently included in the Core Strategy. The table overleaf puts

our projections into that context.


__________________________________________________________________________________________


COMPARISON BETWEEN 2009 VISITOR ACCOMMODATION STUDY AND 2015 HOTEL FUTURES

STUDY PROJECTIONS

2009 Visitor Accommodation Study

Projected Additional Hotel Bedrooms

Required 2009-2026

New Hotel

Bedrooms

Opened/

Opening

2009-2016

Projected Additional Hotel

Bedrooms Required 2017-2026

Low

Growth

Medium

Growth

High

Growth

Low

Growth

Medium

Growth

High

Growth

444 599 761 6301 0 0 131

2015 Hotel Futures Study

Projected Additional Hotel Bedrooms

Required 2015-2030

New Hotel

Bedrooms

Opened/

Opening

2015-2016

Projected Additional Hotel

Bedrooms Required 2017-2030

Low

Growth

Medium

Growth

High

Growth

Low

Growth

Medium

Growth

High

Growth

931 1246 1607 4782 453 768 1129

Notes:

1. New hotel bedrooms 2009-2016: Premier Inn (108); Halcyon Apartments (8); Bailbrook House

(13); Hilton Bath City (23); Gainsborough (99); Apex (177); Z Hotel (148); Hotel Indigo (54)

2. New hotel bedrooms 2015-2016: Gainsborough (99); Apex (177); Z Hotel (148); Hotel Indigo (54)

5.1.14. Our 2015 projections show the following:

The pipeline supply of upscale/full service hotels is more than enough to meet

the projected requirement for additional supply at this level through until at

least 2020. This suggests that the new hotels that will open in the city by 2017

may result in a more competitive hotel market at this level, at least in the short

term, potentially leading to a reduction in occupancy and average room

rates, depending on how strongly the Sunday-Thursday market grows, how

much new business the new hotels generate, and the marketing and rate

strategies that existing hotels adopt to counter the impact of the new hotels.

In terms of total satisfied roomnight demand however, Bath will see a

significant boost from these new hotels.

There is likely to be potential for additional upscale/full service hotel

provision in Bath beyond around 2022/23, depending on how strongly the

Sunday to Thursday market grows.

There could be scope for up to another 202-603 upscale/full service hotel

bedrooms to open in the city to meet the demand for additional hotel

supply at this level by 2030, in addition to the 330 bedrooms that are

already in the pipeline.

There could be potential for an additional budget/limited service to open in

Bath by 2020 in addition to the Z Hotel.


__________________________________________________________________________________________


There could be scope for up to a further 251-526 budget/limited service hotel

bedrooms in the city by 2030, over and above the Z Hotel.

5.1.15. The growth projections do not model future requirements for

serviced apartments and 3 star hotels: the supplies of these categories of

accommodation are not sufficient for us to run meaningful growth

projections. Given the growing interest in serviced apartments as an

alternative to a hotel stay, with the greater space, flexibility and in some

cases value for money that they offer, we believe that there is potential

for more serviced apartment provision in Bath, and potentially an

aparthotel. With the increasing polarisation in the hotel market

between upscale, full service hotels and budget/limited service

hotels we believe that there is less potential for additional 3 star hotel

provision in Bath: indeed the city's 3 star hotel supply is set to reduce

further with the conversion of the Pratt's Hotel to the boutique Hotel

Indigo.

5.1.16. Making any sort of market forecasts is an uncertain process: all

forecasts are based on judgement and assumptions, and are

susceptible to unforeseen changes. The projections we have prepared

should thus be taken as indicative only and should be reviewed at

regular intervals. They have been prepared to provide an illustration

of the numbers of new hotel bedrooms that might be needed

under different growth scenarios. Clearly the further ahead that one

looks, the more difficult it is to project growth accurately. The

projections to 2025 and 2030 should thus be treated with caution and

should be periodically reviewed and revisited, particularly as new

supply comes on stream.

5.1.16. The growth projections and requirements for additional hotel

provision that they show do not take account of the potential impact

of new budget/limited service hotels on the city's remaining 2 and 3 star

hotels, Bath's guest house and B&B sector, or hotels in surrounding


__________________________________________________________________________________________


areas. In planning the expansion of hotel provision ongoing support for

this sector needs to be considered and is included in our conclusions

and recommendations in Section 6.

5.2 Hotel Developer & Operator Interest in Bath

Introduction and Approach

5.2.1. Testing hotel developer and operator interest in a destination brings a live perspective

on hotel investment from the sharp end of those endeavouring to deliver new hotels

here. It is an opportunity to probe perceptions of the city and hotel market, specific

brand interest and locational preferences, gain feedback on any sites reviewed, and

a view on the obstacles to gaining representation here.

5.2.2. By way of context, we initially provide below some ‘scene setting’ in terms of the

impact of the performance of the economy on hotel development, followed by an

outline of hotel business models and funding routes, which should help to explain the

hotel developer and operator responses, particularly in terms of the challenges faced

to get new hotels off the ground.

The Economic Backdrop

5.2.3. Hotel performance and the hotel investment cycle is closely linked to trends in the

national and local economy and so the economic downturn that began in 2008 and

the subsequent climb out of recession has hit the sector in several ways. Hotel

performance fell back with occupancy dropping below 70% from 2009, only

recovering to pre-recession levels in 2013. In terms of achieved room rates, they have

taken until 2014 to recover to these levels. The drop in performance affected end

values in some cases to the point where it would cost more to build a hotel than its

value, resulting in hotel investors holding back on new build schemes until yields

improved. This has made funding more difficult to secure, especially for small hotel


__________________________________________________________________________________________


companies and franchisees, and when available often on less favourable terms, with

less debt funding and more equity required. These trends have had implications for

the type of new hotel being delivered, favouring conversions and re-brandings

alongside refurbishment and improvement, encouraged by the ability to buy existing

hotel stock at less than replacement value.

5.2.4. As a result of this risk-averse climate, many hotel companies are now focusing on

asset-light development strategies that don’t involve them in capital outlay. A

number of 4 star and luxury international brands have for some time only done

management contract deals, but certainly their prevalence has spread as funding

has become more difficult to secure. These schemes involve significant levels of

investment and what the operator brings to the table is their sector expertise and

brand strength. This reinforces an earlier trend in the sector pre-recession, for hotel

companies to divest themselves of their property assets whilst retaining the contract to

operate – Hilton and Accor are good examples.

5.2.5. Whilst funding 3 and 4 star hotels has been a challenge during the economic

downturn, budget hotel development has continued apace: Travelodge and Premier

Inn have remained active, offering the advantage of their ability to take lease deals in

developer-led schemes. One advantage of the downturn in the property market has

been that residential and some commercial sites have come forward for hotel

development that would not previously have been available or affordable. A weaker

market has also seen some distressed hotels coming onto the market being bought up

by chain hotel companies and re-branded. London has also been a key focus of

hotel development interest, driven by strong performance and the 2012 bounce.

5.2.6. PwC, one of the UK's leading hotel consultancies, identifies a solid return to revpar

growth as critical to de-risking hotel investment; with revpar having turned the corner

in 2014, access to finance should improve and the pace of new hotel development

should accelerate. Growth will vary between regions and segments, with London

likely to continue to see the highest growth in supply, and key regional cities having

the largest active hotel development pipelines. The structural shifts that have taken

place continue to squeeze the middle, with budget hotels making up 50% of total


__________________________________________________________________________________________


pipeline schemes identified in PwC’s hotel forecast, and the four and five star

segment accounting for almost 40%.

5.2.7. In overview, the Credit Crunch and recession have inevitably had an impact on

slowing the development plans of hotel companies, and seen new routes to delivery

emerging. The upturn in the hotel market and economic growth looks likely to

improve the climate for hotel investment, though in counterbalance the upturn in

demand from residential and office markets will mean greater competition for land,

making it harder and more expensive to acquire sites.

Hotel Business Models & Funding Routes

5.2.8. Hotels can be developed and operated under a number of different business models

(summarised in the table overleaf) with hotel brand owners, franchisees and property

developers playing different roles in each case, with development and operating risks

shifting under the different models.

5.2.9. The levels of capital outlay as well as development risk required by a hotel company

therefore vary considerably between these options. Many more hotel operators,

particularly at the 4 star level, which is much more capital intensive, are likely to be

interested in options put to them that involve management contracts than in building

and funding hotels themselves, as access to capital will naturally restrict the latter and

require hotel companies to prioritise their investment locations.

5.2.10. Many of the chain hotel companies will have a mix of the above structures in place,

though some do prefer a single route. Often franchisees are looking to build the asset

value of the company with a view to exit within a 5-10 year period, and in such

situations are less likely to be interested in lease options.


__________________________________________________________________________________________


Table 18

HOTEL DEVELOPMENT & OPERATING MODELS

Hotel Development/Operating Model Property

Company Risk

Hotel Company

Risk

Hotel company (hotel brand owner) develops the

hotel & subsequently operates and markets under

one of its brands

e.g. Whitbread builds and operates a hotel under

its Premier Inn brand

x √

Hotel company (hotel brand franchisee) develops

the hotel then operates and markets under a hotel

brand through a franchise deal with a hotel brand

owner

e.g. Sojourn Hotels builds a hotel and operates it

under a Hampton by Hilton franchise agreement

with Hilton Hotels

x √

Property company develops the hotel & seeks a

hotel company to lease the hotel

e.g. Equity Estates builds the hotel and leases to

Travelodge

√ √

(depending on

the type of

lease)

Property company develops the hotel & seeks a

hotel company to purchase the freehold of the

hotel

√ x

Property company develops the hotel & employs a

hotel company to manage the hotel under a

management contract

√ √

(some

depending on

the terms of the

management

agreement)


________________________________________________________________________________________


5.2.11. Lease models require a little more explanation, as there are some key issues

surrounding lease structures that are impacting upon the ability to deliver hotel

developments currently. Developers require hotel operators to take a fixed lease, a

standard institutional lease that will give a guaranteed fixed payment per room

over a period of 20-30 years. Once secured, this guaranteed income stream makes

the development fundable, and the developer can secure finance on the back of

this. On completion the developer may retain or sell the investment. Currently, only

Travelodge and Premier Inn are able to take such leases, as only they have the

strength of covenant required. One or two of the multiple brand chains have taken

leases, but generally these will only be for large hotels in premium locations such as

London or Edinburgh, where occupancy and high rates are guaranteed. There are

accounting implications of fixed leases also, as they represent a financial

commitment going forward, and this has also put hotel companies off this model.

5.2.12. More favoured by hotel companies are variable leases, made up of a combination

of base rental and a share of turnover. Some guarantees can be built into these

arrangements, but should the market fall back, the risk and impact is shared by the

developer/funder and the operator. Their responsiveness and flexibility accounts

for their appeal to hotel companies. Certainly in previous recessionary climates,

fixed leases have contributed to the downfall of hotel companies, as they became

unable to meet their rental commitments when trading performance fell back.

However, there is evidence that these turnover leases make it difficult to fund

development because they don’t give the same fixed income stream.

5.2.13. The differing objectives and requirements of developers/investors and operators has

led to something of an impasse and resulted in it being difficult to get hotel

schemes off the ground. During our consultations with hotel companies we have

come across numerous schemes and sites that have stalled for this reason, with few

hotel operators able or willing to do the sort of deal the funding institutions require.

5.2.14. The funding climate and the changes in the way that hotels are being delivered

has had an impact on the development strategies of hotel companies, with

schemes increasingly developer and/or investor-led. Many hotel developers and

operators have stopped having target lists of locations where they would like to be,

rather considering schemes on an individual basis, if they are live. Many are willing

to respond to specific sites and schemes, and to work with a developer on sites and

locations to determine the strength of the market and the most appropriate brand

to consider. From a destination or landowner point of view, the response should be

about making the case and evidencing the potential.


________________________________________________________________________________________


5.2.15. The difficulty in securing funding for hotel schemes has also led to other

interventions being used to secure hotel schemes. Local authorities have begun to

provide funding to support the development of hotels as part of strategically

important mixed-use schemes and the conversion of architecturally important

buildings to hotels. In Hampshire, Eastleigh Borough Council has funded the

development of a new Hilton as part of the development of the Ageas Bowl cricket

ground on the edge of Southampton. In Newcastle, the City Council has borrowed

£30m to help fund the development of a 250-bedroom 4 star Crowne Plaza as part

of the first phase of the Stephenson Quarter regeneration scheme. Travelodge has

been working with a number of local authorities nationally, where the Council has

invested in the hotel; an example is the Redhill Travelodge and town centre mixed

use scheme in Surrey. IHG have also worked on several projects involving Council

funding of hotels, most recently for Holiday Inn and Holiday Inn Express hotels in

Stockport and Blackpool. In each case the Council has funded, developed and

owns the hotel – or bought it back off the developer – and taken a franchise with

IHG, with an option to put in place a management company.

Assessing Hotel Company Interest in Bath - Sampling and Approach

5.2.16. In order to establish the likelihood of bringing hotel development forward in line with

the market potential identified, Hotel Solutions undertook a hotel developer and

operator testing exercise, via structured telephone interviews with the Acquisitions

Directors of the major hotel brand owners in the UK. In determining which to

target, we took account of the market findings, gaps in representation compared

to comparator heritage cities, known past interest in Bath and hotel offers known to

be active in the market currently, particularly emerging and innovative brands new

to the UK.

5.2.17. Over 25 hotel developers, operators and investors were contacted; a full list

together with responses can be found at Appendix 4. A number of these hotel

companies operate multiple brands, ranging from budget through to luxury offers,

enabling a wider view on potential to be gleaned and also some insight into the

requirements for hotels at different levels in the market, particularly in terms of

performance (occupancy and achieved room rate)


________________________________________________________________________________________


Interest by Standard

5.2.18. At the time of writing, a total of 20 hotel companies had responded, with 18

expressing interest in Bath. Two were not interested in being represented in Bath, the

principal reasons being:

A lack of corporate demand in volume;

A weakness in the mid-week market;

The length of time taken to progress sites and schemes in Bath.

5.2.19. This interest represented an even wider number of brands – 44 in all, 47 if we include

new brands already committed to the city1 - which by standard and type of offer

covered the whole spectrum of provision. Several were prepared to place multiple

brands in Bath at different levels in the market. A summary of interest by brand and

standard is presented in the table below.

Table 19

HOTEL COMPANY INTEREST IN BATH – BY STANDARD

LUXURY/5 STAR 4 STAR

BOUTIQUE/

LIFESTYLE

3 STAR

Luxury Collection Apex1 AC by Marriott Courtyard by Marriott

Renaissance Crowne Plaza Bespoke Four Points

Quorvus Doubletree by Hilton Hotel du Vin Hilton Garden Inn

Wyndham Golden Tulip Hotel Indigo1 Holiday Inn

Autograph Marriott Malmaison Ramada

Mercure Radisson Red

Novotel

Radisson Blu

Ramada Plaza

Tribute

Village

BUDGET

BOUTIQUE

UPPER TIER BUDGET BUDGET EXTENDED STAY

Nadler Express by Holiday Inn Days Inn Adagio

Aloft Hampton by Hilton Ibis Beyonder

Moxy Ramada Encore Premier Inn (2) Bridge Street

Sleeperz Tryp Travelodge Residence Inn

Z Hotel1 SACO

Ibis Styles Staybridge Suites

Notes:

1 Already committed to Bath/ under construction

Italics – awaiting final confirmation pending initial feedback

1 Apex, Hotel Indigo, Z Hotel


________________________________________________________________________________________


5.2.20. It is notable that a significant proportion of this interest is for upscale brands and

brands that many locations outside London cannot support, including some luxury

offers.

Interest by Company

5.2.21. The table overleaf summarises brand interest by hotel company, and minimum size

required.


________________________________________________________________________________________


Table 20

HOTEL COMPANY INTEREST IN BATH - BY COMPANY

COMPANY

BRAND STANDARD SIZE

(Rooms) Accor Novotel 4 star 150-200

Mercure 4 star 80-160

Adagio Extended stay 70

Ibis Styles Budget Boutique 100-200

Ibis Budget 100-200

Bespoke Bespoke Boutique 70+

Bridge Street Bridge Street Extended stay 50-120

Frasers Hospitality Hotel du Vin Boutique 45

Malmaison Boutique 100+

Hilton Doubletree 4 star 80-150

Hilton Garden Inn 3 star 100-150

Hampton by Hilton Upper tier budget 100-150

IHG Staybridge Suites Extended stay 75+

Crowne Plaza 4 star 150-200

Holiday Inn 3 star 120-150

Express by Holiday Inn Upper tier budget 150+

KSL Capital Village 4 star 150+

Louvre Golden Tulip 4 star 100+

Marriott Autograph Luxury 100+

AC by Marriott Boutique 100-120+

Marriott 4 star 150-200

Renaissance Luxury 150-200

Courtyard 3 star 175-200

Moxy Budget Boutique 150

Residence Inn Extended stay 125

Nadler Nadler Budget Boutique 100-120

Rezidor Quorvus Luxury 75

Radisson Blu 4 star 125-175

Radisson Red Lifestyle 125-150

SACO SACO Extended stay 100+

Beyonder Extended stay 100+

Sleeperz Sleeperz Budget Boutique 100-120

Starwood Luxury Collection Luxury 80+

Tribute 4 star 100+

Four Points 3 star 100-120

Aloft Budget Boutique 110+

Travelodge Travelodge Budget 150

Whitbread Premier Inn Budget 60-120

Wyndham Wyndham Luxury 60-200

Ramada Plaza 4 star 60-200

Ramada 3 star 60-200

Tryp Upper tier budget 60-200

Ramada Encore Upper tier budget 60-200

Days Inn Budget 60-90


________________________________________________________________________________________


Other Requirements

5.2.22. In terms of other requirements of hotel developers and operators:

Size

o Requirements varied between brands, with some brands having

harder brand standards, and others being more flexible on physical

attributes of the building and offer. For most, the minimum size of

hotel would be 100 bedrooms, but in fact many were looking to place

larger hotels in Bath to spread the high development costs of

delivering here across more bedrooms. Quantum here is key to

making it stack up. Those that would deliver smaller hotels were

generally either budget or boutique/luxury and more niche offers.

Location

o Most hotel companies wanted to be as central as possible, with the

station and Roman Baths being pointed out as reference points.

Being a tight city centre, most took the view that sites coming forward

were likely to be reasonably accessible/close to the centre. The

Holiday Inn Express on Lower Bristol Road is seen as the furthest

walkable point for a hotel to be located.

o Given the difficulty of securing sites in Bath, many were prepared to

consider other locations on the edge of the centre or even beyond.

One of the advantages of such locations was seen to be the potential

availability of car parking, which is difficult to secure on site in the city

centre. The budget operators were flexible about edge of centre

locations, particularly as they have representation in the city centre

already.


________________________________________________________________________________________


Deal

o Some hotel companies have very rigid business models where they do

not purchase but work with an investor and then manage, examples

being Rezidor and Starwood.

o Some only want freehold deals e.g. Hotel du Vin.

o Whilst Premier Inn and Travelodge have led the way in being able to

take on FRI leases – almost exclusively at one point – a number of

other operators indicated that they would consider a lease in Bath,

which is a reflection of the strength of the market and asset values

here. Examples include Marriott and Nadler.

o Management contracts could also be supported by other forms of

financial support here such as key money, subordinated loans, small

pieces of equity and financial guarantees.

o New build, conversion and acquisition options would be considered

by most hotel companies in Bath, given the difficulty of securing a site

here. This would include re-positioning existing hotels, and converting

office blocks. Most companies would go into mixed use schemes.

The Ability to Generate New Demand and Add Value

o Several brands indicated their potential to help grow the market in

Bath through generating new demand by their brand presence. This

included:

Hotel du Vin and Malmaison who have their own following;

Nadler also on a smaller scale, but with quite an international

following and Millennials focus.

Rezidor felt that their international branding would draw in

upmarket overseas visitors and residential conferences,

especially in the off-season.

Village has a strong leisure offer that can generate leisure breaks,

but also serves the corporate market through its large business

centre facilities. This brand also appeals to the family market.

Louvre have new owners, the Jin Jiang group, which enables

them to access the growing Chinese market.

Starwood has the 4th largest membership loyalty database in the

world and great leisure demand for the UK which is currently

untapped in Bath.


________________________________________________________________________________________


What Hotel Companies Say About Bath

5.2.23 This is what some of the Acquisition Managers of key hotel development,

investment and operating companies had to say about Bath:

‘We would crawl over hot coals to find a suitable site in Bath to turn into a

hotel. We would look at anything, we are really keen to get back into the

city’

‘Bath is an excellent market, largely driven by tourism. Due to strong

restrictions on new development, the supply/demand balance has

historically resulted in strong hotel performances’

‘Given the upmarket and international nature of demand for Bath, our

interest would be in 4 and 5 star hotels. To bring in something lower would

be to under-utilise the opportunity'

'Bath already has a good inventory of old, traditional hotels. What the city

needs is newer hotels with modern levels of services and facilities, including

those that can accommodate reasonably sized conferences and functions’

‘Given the shortage of well situated, good–sized sites in Bath we would

consider multiple options – mixed use or standalone, acquisition of an

existing hotel, or conversion of a building to hotel use’

‘Our upscale brand has the correct market positioning to capture the

potential trading levels achievable’

‘This is one of the few provincial markets that would support a full service

hotel; a compelling economic case’

‘Bath is a real destination and a great market with excellent trading

performance’

‘Bath is a ‘must have’ city’


________________________________________________________________________________________


Obstacles to Securing a Site and Delivering a Hotel Scheme in Bath

5.2.24. Bath was ubiquitously described by the hotel development market as a high barrier

to entry market, much like Oxford and Cambridge. The key challenges are

summarised well in the response from one multiple brand owner when asked what

were the main obstacles:

‘All of the usual ones, in large quantity! : lack of sites, small sites, building

restrictions, difficulty with planning, expensive. However, all of this is

acceptable to a degree as it protects the city and preserves the elements

which make it so attractive’.

5.2.25. The difficulty is when these come together to burden a hotel scheme to such a

degree that it becomes difficult to make a hotel development stack up, even with

the high levels of performance achieved in the city:

‘The London effect of increasing costs is rippling outwards making it difficult

to get upscale hotel schemes to stack up

5.2.26. Not only are there issues in relation to enhanced costs associated with converting,

renovating or re-positioning a character building in a sensitive cityscape, but also

the price of sites and buildings, which is made worse by competition from

alternative, higher value uses. The competition presented by the demand for,

returns on, and ability to finance student accommodation and other forms of

residential accommodation are a particular challenge, likely to worsen now that

the economy and market has picked up. There was also mention of competition

from office uses and associated issues around the retention of employment land

and retention of employment from office conversions, which presents a challenge

for conversions to budget hotels, which are unlikely to generate the same numbers

of jobs as offices previously did.

5.2.27. Clearly, Bath has great appeal as a hotel investment location but also represents a

great challenge. The quote below from an international multiple brand owner

demonstrates the positive and negative perceptions and realities of developing

hotels in and around the city.

We would deploy and of our brands into Bath, but these opportunities here

are like pulling hens’ teeth!’


________________________________________________________________________________________


5.3 Hotel Site Availability

5.3.1. The availability and deliverability of suitable hotel sites will clearly be a key

determinant of future hotel development in Bath, and featured large amongst the

obstacles identified by hotel companies above. Site assessments work has not

been part of the brief for this consultancy commission; in 2009 this was an additional

module of work undertaken that then enabled some matching of market potential,

site requirements (of hotel companies), site suitability (the characteristics of these

sites), and destination objectives in each case. However, we would make the

following observations in relation to the sites situation and hotel development

potential:

There are a lot of good sites and buildings in Bath with potential for hotel

development. Land and property values are however very high and

competition from higher value uses is fierce, presenting real challenges for

hotel companies that want to open new hotels in the city. Policies that seek

to manage the loss of office floorspace in the city centre may also make the

conversion of suitable redundant office buildings to budget hotels difficult,

particularly in terms of the requirement to deliver a similar level of alternative

employment opportunities.

Some sites with potential and/or planning for a hotel use have not

happened for a variety of reasons e.g. value, competition, cost, complexity

of delivery.

There are currently no sites allocated solely for hotel development.

The process of preparing the Placemaking Plan presents a window of

opportunity to build hotel requirements into the plan making process, with a

series of major redevelopment sites potentially coming forward.

Hotels are being included in some mixed use schemes as part of the

Placemaking Plan Options Document, with Bath Quays North and Manvers

Street being the notable ones; but these will only partially address the

identified potential and the hotel element could get squeezed out of mixed

use schemes by higher value uses.

There are limits to how much the planning system alone can steer and

influence future hotel development, particularly as a hotel use covers a

broad range of offers.

A hands-off approach may well result in the city not getting the hotel offer it

deserves, or the offer that is wants to help build the destination for the future.


________________________________________________________________________________________


The market potential at high growth rate could require up to 7-9 hotel sites

to deliver the volume of rooms required;

An option might be to plan proactively now for a further 3-4 new hotels

(beyond the pipeline hotels that will have opened by 2017) to meet the low

growth projections, prioritising the locations that the Council most wants to

see delivered, and then either leave the delivery of the balance to the

market, or review the situation in 5-6 years taking account of the ongoing

and projected demand for hotel accommodation at that time. The risk in

this approach is that a future review could find further requirements for hotel

expansion that cannot be met as the potential sites for new hotels may

have gone to alternative uses.

Pro-activity alongside planning presents more of an opportunity to influence

the location and type of hotel development, and might include any

combination of working with hotel developers, working with site owners,

promoting Council owned sites for hotel development as well as the

planning tools of allocation, safeguarding and feeding hotel uses into

Masterplans;

In order to effectively intervene with a pro-active approach, there is a need

for a defined hotel investment strategy based on a clearly articulated role

for hotels to support both visitor economy targets and wider destination

objectives;

From here it should be possible to prioritise and match brands and sites that

can best help deliver these aims over short, medium and long term

timescales.


________________________________________________________________________________________


6. CONCLUSIONS & RECOMMENDATIONS

________________________________________________________________________________________

6.1. The Requirements & Potential for Hotel Development in Bath

6.1.1. Our research findings show potential for significant hotel development in Bath both

in terms of market potential and hotel company interest. The key question is how

much of this potential does the city want to accommodate and at what level in

the market? The answers to these questions will depend on the future strategy for

Bath as a visitor destination:

If the city wants to grow staying tourism volumes, it will clearly need more

hotel provision. With hotels trading at such high occupancies for much of

the year growth in staying tourism will need to be largely supply led. There is

otherwise little hotel capacity to support staying tourism growth. The

quantum of new hotel provision needed will depend on the targets for

growing Bath's staying visitor market. The type of new hotel provision

required will depend on the markets that the city wants to attract.

If the city wants to convert more day visitors to staying visitors it will need

more lower-priced hotel accommodation that is affordable for the visitors

that currently stay in hotels in surrounding locations and commute into Bath

as day visitors.

If the city wants to attract more companies it will need a greater supply of

hotel accommodation at a price point that companies can afford to pay

for single occupancy room rates.

If Bath is to remain competitive as a staying visitor destination it will need a

good mix of high quality, contemporary hotel accommodation, including a

strong independent hotel offer. Care is needed to avoid undermining the

independent hotel sector, which is a key part of Bath's distinctiveness as a

place to stay.


________________________________________________________________________________________


6.1.2. Our assessments of the requirements and potential for additional hotel provision in

Bath show no immediate requirement before 2020 for additional upscale/full

service hotel provision, beyond the Gainsborough Bath Spa and pipeline Apex and

Indigo hotels. The market needs to absorb this new supply first. There remains very

strong interest however from hotel companies and independent hoteliers that

would like to open upscale hotels in Bath. There is no need to deter this interest, but

no need either to actively encourage it. Further upscale hotel development should

be left to the market to determine.

6.1.3. Our growth projections show that Bath should be able to support another

budget/limited service hotel within the next 5 years, in addition to the Z Hotel.

Beyond 2020 we are also showing potential for further budget/limited service hotels

through until at least 2030.

6.1.4. There are good reasons for encouraging budget/limited service hotel development

in Bath:

There is clear demand/potential for more budget hotels in Bath;

Budget brands will generate new business for the city as a result of their

brand strength and customer base, national marketing, central reservations

and referral business from sister hotels;

Budget hotels will provide a more affordable option for the corporate

market, contractors, overseas tourists and UK leisure visitors - potentially

helping to convert day visitors that stay in hotels in surrounding areas to

staying visitors;

Budget hotels will contribute to the evening restaurant economy in the city

as they have limited food and beverage facilities;

Budget hotels can offer a good use for redundant office buildings;

Budget hotels can have a good fit for less attractive and less well located

sites;

There is a much greater chance of delivering budget hotels through lease

deals;

With their lower staffing levels and limited food and beverage provision,

budget hotels are less likely to exacerbate the problems that many of the

city's hotels face in terms of staff recruitment, particularly for chefs.


________________________________________________________________________________________


6.1.5. There are also some negatives as to why significant budget/limited hotel

development might not be so good for Bath :

New budget hotels could impact negatively on the city's remaining 3 star

hotels, its guest house and B&B sector and hotels in the surrounding area.

More budget hotels may attract more stag and hen parties;

Budget hotel operators tend to want to implement their standard models

and designs which may not be acceptable in a sensitive historic landscape;

however, with such high returns at stake, there should be some flexibility for

suitable changes to be negotiated through the planning system without

impacting too negatively on project viability;

Budget hotels will create fewer jobs - although this can also be seen as a

positive as they will not therefore add significantly to the staff recruitment

challenges that the city's hotel sector already experiences.

6.1.6. Care is therefore needed to attract budget/limited service hotel products and

brands that will add to the city's hotel offer. Perhaps the focus should be more on

attracting upper-tier budget brands e.g. Hampton by Hilton, and/or some of the

new budget boutique brands e.g. Moxy and Aloft.

6.1.7. Our research also suggests that there is market potential for additional serviced

apartment provision in Bath, and possibly an aparthotel. This type of supply would

broaden the city's hotel offer. It would appeal to the corporate market, especially

to longer staying corporate visitors. It is also becoming increasingly popular with

leisure visitors as a result of the greater space, flexibility and sometimes value for

money that it can offer. Serviced apartments have particular appeal to families

and overseas tourists for these reasons. The only potential negative from an

increase in serviced apartments is that they also appeal to the hen party market.


________________________________________________________________________________________


6.2. Tackling the Sites Issue

6.2.1. The availability of suitable and affordable sites for hotel development is the key

barrier to growing Bath's hotel supply. Relatively few sites come up and there is such

strong competition from student accommodation and residential development

against which a hotel use cannot compete on value. How best to address this issue

should be a key consideration for the Council. There are two key roles that it could

play if it wants to intervene proactively to address the hotel sites issue:

As landowner and developer/investor - many of the key regeneration/

development sites in the city centre are in total or partial Council ownership.

The Council thus has more control over the type of uses that these sites go

for, and in the type of hotels that could be included in development

schemes (if a hotel use is seen as appropriate within the mix).

By working with land and property owners to bring forward sites and

buildings that would be suitable for hotel development and match them

with key target hotel products and brands that will help to achieve the

strategy for growing staying tourism in the city (whatever that looks like

when finally agreed).

6.2.2. As hotels are defined a city centre use, the Council is unable to influence the

standard and type of hotel that might be brought forward in the city centre from a

planning perspective. It only has control over the scale, design and impact of city

centre hotel schemes. Its other main influence on hotel development from a

planning point of view is in terms of preventing or limiting hotel development in

outer areas through a stringent application of the sequential test.

6.2.3. If the Council decides to take either or both of the more interventionist approaches

to addressing the hotel sites issue discussed above, there are two aspects to

consider - the timing of when hotel development needs to come forward, and a

locational strategy for different types and standards of hotel, to optimise the use of

available sites and to achieve the strategy for staying tourism growth.


________________________________________________________________________________________


6.3. The Timing of Hotel Development

6.3.1. In an ideal world new hotel development would be phased to coincide with

market growth to avoid any undue impact on existing hotels. In reality this rarely

happens; hotel development is usually cyclical. In most hotel markets hotel

performance builds to a point where developers decide that there is potential for

them to open new hotels. Depending on the strength of the market opportunity a

number of new hotels may open in quick succession. Hotel performance will

generally drop back a little following new hotel openings, depending on the scale

and timing of new provision coming on stream and how strongly the market is

growing. Hotel demand and performance will then build further until such time as

further new hotels can be supported.

6.3.2. In terms of the timing of new hotel development in Bath we make the following

observations:

The most immediate requirement is for another budget/limited service hotel

or an aparthotel.

Additional upscale/full service hotel provision will not be required much

before 2022/23.

The phased release of sites in the Enterprise Area, some of which could

incorporate a hotel, provides an opportunity to exert some control on when

hotel schemes might come forward; the trick will be to tie this in with the

market need in terms of the most appropriate type of hotel with both

market and destination/scheme fit.


________________________________________________________________________________________


6.4. A Locational Strategy for Hotel Development in Bath

6.4.1. In terms of a locational strategy we would suggest the following:

Prime sites in the historic core of the city centre should be prioritised for

upscale/full service hotel development;

Budget/limited service and aparthotel development can be more

appropriately developed on and steered towards edge of city centre and

riverside sites;

There could be a case for considering budget hotel development in outer

locations that are well served by bus routes;

Buildings of character should be used for boutique hotels;

Redundant offices may be more suited for conversion to limited service

hotels, but might also present redevelopment rather than conversion

opportunities where more development/a better site solution and scheme

could be achieved.

6.4.2. Once the locational strategy has been agreed, it will be important to

communicate it to stakeholders, including site owners and hotel companies; act on

it as a Council where direct intervention is achievable (e.g. where the Council is a

full or partial site owner and/or could act as the developer / investor for a scheme

that includes a hotel); and where possible build it into policy and strategy making,

in order to give direction to the market about what the Council is looking to see

delivered in terms of new hotel provision


________________________________________________________________________________________


6.5. Implications for the Placemaking Plan

6.5.1. In finalising the Placemaking Plan we would suggest the following:

There is a need to plan for a greater number of additional bedrooms in the

city centre than is identified in the Core Strategy. This Hotel Futures update

presents the market evidence and rationale to do so, with clear links to the

previous work and the context of a much improved climate for investment.

Including the suggested locational strategy for hotel development within

the Plan should be considered as one route to directing and giving clarity

to the hotel development market.

Further work is needed to more closely assess the suitability of key

regeneration sites to the requirements of hotel developers and operators,

and to match best fit hotel products and brands in each case.

It may be appropriate for the Placemaking Plan to consider removing or

relaxing the requirement for office conversions to deliver an equivalent

number of jobs, which will be a significant barrier to hotel conversion,

particularly at the budget/limited service level.

6.6. Supporting Existing Hotels, Guest Houses and B&Bs

6.6.1. Our final recommendation is that the Council needs to support existing (and

new)hotels, guest houses and B&Bs through the following measures:

Effective management, maintenance and improvement of the city's public

realm fabric;

Further development of the city's visitor offer to maintain and broaden its

appeal as a visitor destination and help encourage longer stays;

Effective marketing of Bath as a visitor destination, focused on boosting

Sunday to Thursday business, particularly during the winter;

Bringing forward office development to grow corporate demand for hotel

accommodation in the city.


________________________________________________________________________________________


6.7. Moving Forwards

6.7.1. In terms of moving ahead, there are a number of modules of work that were

discussed in the run up to commissioning the current study that could be of benefit

in refining outputs and forward action. These include:

Fleshing out the locational strategy on the ground, in terms of more detailed

assessment of sites and matching best fit hotel products and brands. This

could be expanded to include the identification and assessment of

additional sites with potential for hotel development, both within Council

ownership and privately owned. Both strands would involve working with site

owners to communicate and deliver the hotel investment strategy.

Targeting best fit brands, with a particular focus on those that can most help

deliver the required growth in staying tourism and help grow the Bath hotel

market in terms of generating new demand and attracting new markets.

This might include some additional targets dependent upon the

understanding that comes out of the more detailed sites work.

Feeding into more detailed financial and physical appraisals being led by

other consultancy teams but requiring a specialist input.

Modelling the potential impact of additional budget/ limited service hotel

provision on Bath’s independent guest house sector. This will be important to

understand to identify any need to try to support this element of the city's

accommodation supply in the face of increased competition.

The Council has indicated that they are reviewing their assets and options

for investment; if hotel investment could be on the agenda, either as an

owner or on a JV basis, it would be valuable to gain some insight into what

other Councils have done in this field. Through intelligence gathered it

would be possible to produce a paper providing both an overview of the

types of interventions other Councils have undertaken, together with some

more detailed case studies that get under the skin of specific investment

and intervention scenarios.


________________________________________________________________________________________


6.8. Concluding Remarks

6.8.1. This is a time of great opportunity for B&NES Council to shape the future of the city in

the interests of its long term viability, sustainability and well-being. The visitor

economy undoubtedly has a key role to play in this, but without increased hotel

capacity will be unable to support the city in fulfilling its potential for staying tourism

growth. With such strong hotel performance in the city; the levels of hotel

developer, investor and operator interest in opening new hotels here; and an

emerging development framework that involves planning for major areas of

change, there is a real opportunity to help overcome the obstacles to delivery

faced by hotel developers. This is a unique opportunity that it is critical to get right,

using the evidence from this Hotel Futures Study as a basis to inform and guide

forward planning.


________________________________________________________________________________________


APPENDICES


________________________________________________________________________________________


APPENDIX 1

BATH - HOTELS INTERVIEWED

Establishment Face-to-

Face/

Telephone Abbey F

Bailbrook House F

Bath Priory T

Combe Grove T

Francis F

Holiday Inn Express T

Lansdown Grove F

Pratt's F

Premier Inn Bath City F

Queensberry F

Royal Crescent F

Royal F

SACO Serviced Apartments T

Haringtons F

Travelodge Bath Central F

Travelodge Bath Waterside F

Redcar F

The Halcyon F


________________________________________________________________________________________


APPENDIX 2

GLOSSARY OF HOTEL DEFINITIONS

Budget Hotel

A limited service hotel providing a basic, good standard en-suite bedrooms, with limited in-

room facilities, services and extras e.g. toiletries, and minimal hotel facilities other than a

breakfast room and possibly a bar and restaurant.

Brand examples include Travelodge, Premier Inn, Ibis, Tune

Upper Tier Budget

A limited service hotel that offers a higher specification room (3 star equivalent) than a

budget hotel, with an integral bar/restaurant and limited meeting rooms; also sometimes a

small gym/fitness room. They tend to be larger hotels of 100-120 rooms and will locate both

on the approaches to towns if close to business/leisure drivers, in town/city centres, and

close to major communications drivers such as airports.

Brand examples include Holiday Inn Express, Ramada Encore, Hampton by Hilton.

3 Star

A full service hotel that offers a restaurant and bar also open to the public, usually

function/conference/banqueting facilities, and often leisure. Branded offers would tend to

be 120-150 rooms+, but independent hotels may be smaller in size. Will locate in city

centres and out of town where there are significant drivers of demand such as business

parks.

Brand examples include Village, Holiday Inn, Courtyard by Marriott, Hilton Garden Inn,

Ramada


________________________________________________________________________________________


4 Star

A full service hotel but with a higher specification and larger bedrooms than 3 star hotels,

usually offering bath and shower, telephone, internet connection, and a wider range of

services including full room service and porterage, and 24 hour reception. A quality

restaurant, bar, a range of meeting rooms and business services, and a health and fitness

centre. These tend to be large hotels, over 150 rooms, and sometimes up to 250 rooms+.

Major city centres are the preferred locations.

Brand examples include Marriott, Crowne Plaza, Hilton, Radisson Blu, Apex

5 Star

A luxury, full service offer, with highly personalised service/high staffing levels, fine dining

and luxury throughout the offer.

Brand examples include InterContinental, Renaissance, Radisson Edwardian

Boutique Hotel

Relatively small (30-50 rooms), high quality, individual hotels that feature contemporary

design and a good food offer. They are often independent hotels or part of small chains

that bear the signature of their founder. However, national brands are beginning to

emerge that are larger format units (100+ rooms) and compete with 3 and 4 star hotels but

achieve a premium on their rate due to their style and service.

Brand examples include Malmaison, Hotel du Vin, ABode, Hotel Indigo, Chapter

Lifestyle Hotel

A new generation of hotel that offers casual hospitality in a smartly designed, high-tech

and modern environment. Hotels feature sleek, contemporary design, relaxed public areas

for guest check-in, mingling and relaxing; a 24/7 freshly prepared food offer; and

bedrooms with a modern and high-tech fit out.

Brand examples include: Radisson Red, Hyatt Place


________________________________________________________________________________________


Budget Boutique

A hotel with similar qualities to a traditional boutique hotel, particularly in terms of being

design-led, but pitched at the mid-market and with less emphasis on levels of service.

Brand examples include Moxy, Aloft, Ibis Styles, Z Hotels, Hub by Premier Inn, Citizen M,

Motel One

Aparthotels, Suitehotels and Serviced Apartments

A new generation of hotel accommodation that combines an element of self-catering

through the provision of a kitchen in each unit, together with hotel services, including

reception, daily cleaning, linen, toiletries and a hotel-style booking system. They are

generally aimed at the extended stay market, and whilst they can offer rooms from one

night upwards, most request a minimum stay. Some are purpose-built units in one

ownership; others are individually owned and managed by an agency. Brands such as

Staybridge Suites will also provide a limited food offer e.g. buffet style breakfast.

Brand examples include Staybridge Suites, Residence Inn, Beyonder, Bridge Street

Worldwide, SACO.

Occupancy Rate

The percentage of all rooms sold as a proportion of all rooms available in that period.

Achieved Room Rate (ARR)

The net average amount of rooms revenue that hotels achieve per night per room let after

deduction of VAT, breakfast (if included), discounts and commission charges. Hotel rooms

revenue divided by the number of rooms sold.

Revpar

Revenue per available room. The net average amount of rooms revenue that hotels

achieve per night per available room after deduction of VAT, breakfast (if included),

discounts and commission charges. Hotel rooms revenue divided by the number of rooms

available in the hotel.


________________________________________________________________________________________

Cambridge Hotel Futures – Final Report – April

2012 – Hotel Solutions

90

APPENDIX 3

HERITAGE CITY HOTEL STOCK & DEVELOPMENT COMPARISONS

________________________________________________________________

The following appendices (Appendix 3a-3e) present comparisons of current (July 2015) hotel

supply, changes in hotel supply between 2009 and 2015, and planned hotel development in

Bath and other comparator heritage cities in England.

The comparator cities are as follows:

Oxford

Cambridge

Chester

York

Exeter

The comparisons cover star-rated, branded and non-inspected hotels with 10 or more

bedrooms. 5 star guest houses and serviced apartment complexes/ aparthotels with more

than 5 apartments are also included in the analysis. Small serviced apartment operations of 1-

4 apartments are not included.

In terms of geographic coverage the comparisons have included hotels in each city (defined

as city centre and edge of city centre) and on the outskirts of each city. For the purposes of

the comparisons hotels in surrounding rural areas have been excluded, although it is

recognised that in some cases such hotels may be part of the overall competitive hotel

supply for each city.

The comparisons are based on desk research as follows:

Interrogation of online hotel booking sites to identify existing hotels;

Internet searches for information on hotel development projects;

Email consultations with Tourism, Economic Development and Planning Officers in

each city.

Key observations on the comparisons are set out in the following pages.


________________________________________________________________________________________



91

a) Current Hotel Supply

Total Hotel Supply

In terms of total hotel supply Bath has the lowest number of hotel bedrooms of any of

the comparator cities.

York has the most significant hotel supply - almost double the number of hotel

bedrooms that Bath has.

Oxford, Cambridge and Chester have similar numbers of hotel bedrooms - 300-600

more than Bath.

Exeter has a similar number of hotel bedrooms to Bath.

Standard of Hotels

Bath has the most upmarket hotel supply in terms of 5 star and boutique hotel


budget hotels.

Bath has four 5 star hotels compared to only one in Oxford, York and Chester and

none in Cambridge and Exeter.

Bath has a similar number of boutique hotel bedrooms to Oxford and York but more

than double the boutique hotel supplies of Cambridge, Chester and Exeter.

Boutique hotels in all six cities are predominantly independent hotels. Boutique hotel

brands represented in the cities are as follows:

o MGallery - Bath

o Malmaison - Oxford

o Hotel du Vin - Cambridge and York

o Hotel Indigo - York

o Abode - Chester and Exeter

o Chapter - Exeter

Bath has the lowest number of 4 star hotel bedrooms. Cambridge, York and Chester

have more than double the number of 4 star hotel bedrooms that Bath has.


________________________________________________________________________________________



92

Bath has by far the lowest stock of 3 star and 2 star/lower grade hotel bedrooms.

Bath has a significant stock of 5 star and boutique guest houses. This type of

accommodation has not so far developed to any extent in the other cities: Oxford,

York and Chester each have only one 5 star guest house, while Cambridge and

Exeter have none.

Exeter and York have two upper-tier budget hotels - a Holiday Inn Express and a

Hampton by Hilton in each case. Bath, Cambridge, Chester and Oxford each have a

Holiday Inn Express.

Bath has the lowest number of budget hotel bedrooms. York and Cambridge have

double the number of budget hotel bedrooms that Bath has.

Serviced apartments and aparthotels comprise a relatively small element of the hotel

supplies of the six cities. Oxford, Cambridge, York and Chester have more serviced

apartments than Bath. Only Exeter has a smaller supply of this type of

accommodation.

b) Hotel Development 2009-2015

Hotel development trends have been similar across all six comparator cities between

2009 and 2015: there has been a general move upmarket, with the upgrading and

repositioning of 3 star hotels as 4 star and boutique hotels, the opening of new 5 star

and boutique hotels in some cities, and some loss of poorer quality 2 star/ lower grade

hotel stock; new Premier Inn and/or Travelodge budget hotels have opened in most

of the cities (other than Oxford); and the supply of serviced apartments and

aparthotels has gradually increased.

Bath and York are the only cities that have seen 5 star hotel development.

Bath has seen the most significant increase in boutique hotel provision. This has been

through the repositioning of existing 2 and 3 star hotels. No entirely new boutique

hotels have opened in Bath. All of the other five cities have seen the opening of new

boutique hotels, including a branded Hotel Indigo in York and an Abode branded

boutique hotel in Chester. In Exeter the former Barcelona boutique hotel has been

rebranded under the Chapter Hotels boutique hotel brand.


________________________________________________________________________________________



93

None of the six cities have seen the opening of new 4 star hotels in the last 6 years.

Two 4 star hotels in Chester have extended.

In terms of upper-tier budget hotel openings, Hampton by Hilton hotels have opened

in York and Exeter. In York the Ramada Encore has been repositioned as a

Travelodge, resulting in only a marginal net change in the city's upper-tier budget

hotel supply.

All of the cities apart from Oxford have seen an increase in budget hotel provision.

Cambridge has seen a significant increase in its budget hotel supply, with the opening

of two Premier Inn and two Travelodge hotels since 2009. Exeter has seen the opening

of two Premier Inns (with a third due to open in October 2015), while York has seen the

opening of a new Premier Inn and the repositioning of the Ramada Encore to a

Travelodge. Chester has seen the opening of a new Premier Inn but the closure of the

former Comfort Inn. A Travelodge also opened in Chester in 2010 but was

subsequently sold in 2013 for conversion to student accommodation. Bath has seen

the opening of a Premier Inn.

Bath, York and Chester have each seen the closure of a 2 star hotel.

All of the six cities have seen a gradual increase in serviced apartment/ aparthotel

provision. Cambridge, York and Chester have seen more significant rises in their

supplies of these types of accommodation. Bath, Oxford and Exeter have seen only a

marginal growth in such provision.

c) Planned Hotel Development

All of the comparator cities look set to see more hotel development than Bath going

forward (if all of the current hotel proposals are progressed).

York and Cambridge are set to see an increase in 5 star hotel provision, with the

planned expansion of The Grand in York and the current upgrading of the University

Arms in Cambridge as a landmark hotel for the city.

Bath is the only city with a new 4 star hotel currently under construction, however

proposals for new 4 star hotels are also being progressed in Cambridge and Oxford,

and look likely to come forward in Exeter and possibly York. In Chester there are plans

for a new 4 star hotel as a replacement for the existing Crowne Plaza.


________________________________________________________________________________________



94

There are plans for Hotel Indigo boutique hotels in Bath and Oxford and proposals for

new small independent boutique hotels in Bath, Oxford and Cambridge.

Bath and York are the only cities that are set to see the opening of budget boutique

hotels, with the Z Hotel being progressed in Bath and plans announced for a Moxy

hotel in York.

At the 3 star level schemes could come forward in Cambridge, Chester and Exeter.

A second Travelodge is currently under construction in Oxford, while a fourth Premier

Inn will open in Exeter in October 2015. There are plans for Ibis budget hotels in

Cambridge and Chester. Bath, York, Chester and Oxford are all target locations for

further Premier Inn hotels, while Travelodge has Exeter, York and Bath as targets for

additional hotels.

A 133-apartment aparthotel has been approved in Cambridge and there are plans

for a 200-apartment aparthotel in York. Roomzzz also has plans to open an aparthotel

in York.


________________________________________________________________________________________



95

APPENDIX 3a

HOTEL LISTINGS FOR EACH COMPARATOR CITIES


________________________________________________________________________________________



96

BATH – CURRENT HOTEL SUPPLY – JULY 2015

Hotel Standard No

Rooms

Brand

City

Royal Crescent

Macdonald Bath Spa

5 star

5 star

45

129

Relais & Chateaux

Macdonald

Bath Priory 5 star 33 Brownsword Hotels

Gainsborough Bath Spa 5 star 99 Leading Hotels of the World

Hilton Bath City

Francis

4 star

Boutique

173

98

Hilton

MGallery

The Halcyon

The Queensbury

Boutique

Boutique

21

29

Abbey Boutique 60

Harington’s Boutique 13

Lansdowne Grove 3 star 54 Shearings

Pratt’s 3 star 46 Atlas Hotels

The Royal 3 star 35

The County 3 star 22 Seasons Holidays

Redcar Lower Grade 41

Parade Park Lower Grade 38

Paradise House 5 star GA 11

Dorian House

One Nine Three

5 star GA Boutique

5 star GA Boutique

13

10

Tasburgh House 5 star GA 12

The Ayrlington 5 star GA 16

The Windsor 5 star GA 15

Villa Magdala 5 star GA 20

Dukes Boutique B&B 17

Grays Boutique B&B 12

Brindleys Boutique B&B 6

Holiday Inn Express Bath Upper-tier Budget 126 Holiday Inn Express

Premier Inn Bath City Budget 108 Premier Inn

Travelodge Bath Waterside Budget 125 Travelodge

Travelodge Bath Central Budget 66 Travelodge

SACO Bath Serviced Aprtments 43 SACO

Halcyon Apartments Serviced Aprtments 8

City Outskirts

Combe Grove Manor 4 star 42 The Hotel Collection

Bailbrook House, Batheaston 4 star 94 Hand Picked Hotels

The Old Mill, Batheaston 3 star 35


________________________________________________________________________________________



97

CAMBRIDGE – CURRENT HOTEL SUPPLY – JULY 2015

Hotel Standard No

Rooms

Brand

City

Cambridge City Hotel 4 star 198

University Arms 4 star 120

Doubletree by Hilton 4 star 122 Doubletree by Hilton

Best Western Plus Gonville 4 star 84 Best Western

Hotel du Vin Boutique 41 Hotel du Vin

The Varsity Boutique 48

Arundel House 3 star 102

Lensfield 3 star 30

Regent 3 star 22

Royal Cambridge 3 star 57 Atlas Hotels

Ashley 2 star 16

Centennial

Fenners

2 star

Lower Grade

39

22

Helen Lower Grade 20

Sorrento Lower Grade 22

Travelodge Cambridge Central Budget 120 Travelodge

Travelodge Newmarket Road Budget 219 Travelodge

Premier Inn Cambridge City East Budget 120 Premier Inn

City Stay Apartments

Nobleo Apartments

Your Space Apartments

Apple Apartments

Signet Apartments

Serviced Apts

Serviced Apts

Serviced Apts

Serviced Apts

Serviced Apts

32

8

65

14

9

City Outskirts

Menzies Cambridge

Hotel Felix

4 star

Boutique

136

52

Menzies

Best Western Plus Cambridge Quy Mill 4 star 50 Best Western

Holiday Inn Cambridge 3 star 161 Holiday Inn

Holiday Inn Express Cambridge

Lovell Lodge

Premier Inn Cambridge A14 J32

Premier Inn Cambridge North

Travelodge Cambridge Orchard Park

Upper-tier Budget

Lower Grade

Budget

Budget

Budget

100

35

154

20

138

Holiday Inn Express

Premier Inn

Premier Inn

Travelodge

Notes:

1. Currently closed for refurbishment


________________________________________________________________________________________



98

CHESTER – CURRENT HOTEL SUPPLY – JULY 2015

Hotel Standard No

Rooms

Brand

City

The Chester Grosvenor 5 star 80

Crowne Plaza Chester 4 star 160 Crowne Plaza

Best Western Premier Queen 4 star 218 Best Western

Macdonald New Blossoms

ABode Chester

4 star

Boutique

67

84

Macdonald

ABode

Oddfellows Chester Boutique 18

Mill 3 star 129

Best Western Westminster 3 star 75 Best Western

The D 3 star 29

Alton Lodge 3 star 21

Lloyd’s of Chester 3 star 17

Belgrave 2 star 34

Brookside 2 star 27

Dene 2 star 53

Eaton 2 star 16

Hotel Roma 2 star 28

Stafford

Bawn Lodge

Chester Court

2 star

Lower Grade

Lower Grade

25

15

20

Stone Villa 5 star GA 10

Holiday Inn Express Chester Racecourse Upper-tier Budget 97 Holiday Inn Express

Premier Inn Chester City Centre

Premier Inn Chester Central North

Budget

Budget

120

31

Premier Inn

Premier Inn

Travelodge Chester Central Budget 60 Travelodge

Roomzzz Chester City Aparthotel 64 Roomzzz

Chester Apartments Serviced Apts 6

Base Serviced Apartments Serviced Apts 7

City Outskirts

Crabwall Manor

Doubletree by Hilton Chester

Mercure Chester Abbots Well

Mollington Banastre

4 star

4 star

4 star

4 star

48

140

126

63

Doubletree by Hilton

Mercure

Holiday Inn Chester South 3 star 145 Holiday Inn

Innkeeper’s Lodge Chester South East

Premier Inn Chester Central South East

Travelodge Chester Warrington Road

Budget

Budget

Budget

14

94

35

Innkeeper’s Lodge

Premier Inn

Travelodge


________________________________________________________________________________________



99

YORK – CURRENT HOTEL SUPPLY – JULY 2015

Hotel Standard No

Rooms

Brand

City

The Grand Hotel & Spa

Hilton

5 star

4 star

107

130

Hilton

York Marriott 4 star 151 Marriott

Royal York 4 star 167 Principal Haley

The Grange 4 star 36

Best Western Plus Dean Court

Novotel York Centre

4 star

4 star

37

124

Best Western

Novotel

Hotel Indigo York Boutique 101 Hotel Indigo

Grays Court

Hotel Du Vin York

Marmadukes Town House Hotel

Boutique

Boutique

Boutique

7

44

20

Hotel Du Vin

Judges Court Boutique 15

The Churchill 3 star 32

Park Inn by Radisson York 3 star 200 Park Inn

Holiday Inn 3 star 142 Holiday Inn

Best Western Kilima 3 star 26 Best Western

Minster 3 star 35

Best Western Monkbar 3 star 125 Best Western

Mount Royale 3 star 24

Hotel 53 3 star 100

Elmbank

Hedley House

3 star

3 star

72

26

Middletons 3 star 54

Alhambra Court 2 star 24

Holgate Hill

Hotel Noir

Newington

Lower Grade

Lower Grade

2 star

18

28

44

The Queens 2 star 78

Wheatlands Lodge Lower Grade 60

Beechwood Close Lower Grade 14

Blue Bridge Lower Grade 18

Jorvik Hotel Lower Grade 22

Heworth Court Lower Grade 11

Galtres Lodge Lower Grade 13

St Denys Lower Grade 11

Bishops 5 star GA 10

Judge's Lodging 5 star Inn 21

Lamb & Lion Inn 4 star Inn 12

Guy Fawkes Inn 4 star Inn 13

Hampton by Hilton York Upper-Tier Budget 119

Ibis York Centre

Premier Inn Blossom Street North

Premier Inn Blossom Street South

Travelodge York Central

Travelodge York Micklegate

Budget

Budget

Budget

Budget

Budget

85

102

91

93

104

Ibis

Premier Inn

Premier Inn

Travelodge

Travelodge


________________________________________________________________________________________



100

The Lawrance Luxury Aparthotel Aparthotel 15

City Lets Serviced Apts 35

City Apartments York Serviced Apts 6

Goodramgate Apartments Serviced Apts 9

Clearly Apartments Serviced Apts 8

The Blue Rooms @ The Blue Bicycle Serviced Apts 6

City Outskirts

Middlethorpe Hall

Mercure York Fairfield Manor

4 star

4 star

29

89

Relais & Chateaux

Mercure

Best Western York Pavilion

Holiday Inn Express York

3 star

Upper Tier Budget

57

49

Best Western

Holiday Inn Express

Premier Inn York North Budget 49 Premier Inn

Premier Inn York North West

Travelodge York Hull Road

Budget

Budget

64

40

Premier Inn

Travelodge


________________________________________________________________________________________



101

OXFORD – CURRENT HOTEL SUPPLY – JULY 2015

Hotel Standard No

Rooms

Brand

City

Macdonald Randolph 5 star 151 Macdonald

Oxford Spires Four Pillars 4 star 174 Four Pillars

Cotswold Lodge 4 star 49

Old Parsonage Boutique 35

Old Bank Boutique 42

Ethos

Malmaison

The Bocardo

Boutique

Boutique

Boutique

16

94

10

Malmaison

Vanbrugh House Boutique 22

Mercure Eastgate 3 star 63 Mercure

Royal Oxford 3 star 26

Best Western Linton Lodge 3 star 87 Best Western

Balkan Lodge Lower Grade 13

Bath Place Lower Grade 20

River Lower Grade 20

Tree Lower Grade 9

Victoria Lower Grade 22

Victoria House Hotel Lower Grade 14

Remont 4 star GA 25

Galaxie 4 star GA 32

Burlington House 5 star GA 11

Head of the River Boutique Inn 12

Noa Residence Svcd Apts 12

Oxford Short Lets Svcd Apts 80

320 Banbury Road Apartments Svcd Apts 7

City Outskirts

The Oxford

Oxford Thames Four Pillars

Hawkwell House

Holiday Inn Oxford

4 star

4 star

3 star

3 star

168

84

66

154

The Hotel Collection

Four Pillars

Bespoke

Holiday Inn

Westwood

Holiday Inn Express Kassam Stadium

Premier Inn Oxford

Travelodge Oxford Peartree

3 star

Upper-Tier Budget

Budget

Budget

20

162

143

197

Holiday Inn Express

Premier Inn

Travelodge


________________________________________________________________________________________



102

EXETER – CURRENT HOTEL SUPPLY – JULY 2015

Hotel Standard No

Rooms

Brand

City

Clarion Buckerell Lodge 4 star 54 Clarion Collection

Mercure Southgate 4 star 154 Mercure

The Rougemont 4 star 98 The Hotel Collection

ABode Boutique 53 Abode

Magdalen Chapter Boutique 59 Chapter Hotels

Southernay House Boutique 10

City Gate 3 star 14 Youngs

Gipsy Hill 3 star 37

Jury’s Inn Exeter 3 star 170 Jury’s Inn

Queen’s Court 3 star 18

St Olaves 3 star 15

White Hart 3 star 55 Marstons

Great Western Lower Grade 33

Clock Tower Lower Grade 18

St Andrews Lower Grade 19

Cedar Lodge 2 star 26

Premier Inn Exeter Central St Davids Budget 102 Premier Inn

Silver Springs Aparthotel 8

Southlands Aparthotel 10

City Outskirts

Woodbury Park 4 star 59

Barton Cross 3 star 9

Exeter Court, Kennford 3 star 63

Best Western Lord Haldon 3 star 23

The Devon 3 star 40 Brend Hotels

Gissons, Kennford 2 star 21

Globe, Topsham Boutique Inn 19 St Austell Brewery

Holiday Inn Express Exeter M5 J29 Upper-Tier Budget 122 Holiday Inn Express

Hampton by Hilton Exeter Airport Upper-Tier Budget 120 Hampton by Hilton

Premier Inn Exeter (Countess Wear) Budget 44 Premier Inn

Premier Inn Exeter (M5 J29) Budget 102 Premier Inn

Travelodge Exeter M5 Budget 102 Travelodge

Exeter Toby Lodge Budget 39 Toby

Innkeeper’s Lodge Exeter East Budget 21 Innkeeper’s Lodge


________________________________________________________________________________________



103

APPENDIX 3b

HOTEL STOCK COMPARISONS BY STANDARD


________________________________________________________________________________________

Cambridge Hotel Futures – Final Report – April 2012

– Hotel Solutions

104

Standard Bath Oxford Cambridge York Chester Exeter Estabs Rooms Estabs Rooms Estabs Rooms Estabs Rooms Estabs Rooms Estabs Rooms

City 5 star 4 306 1 151 1 107 1 80

4 star 1 173 2 223 4 524 6 645 3 445 3 302

Boutique 5 221 6 219 2 89 5 187 2 102 3 122

3 star 4 157 3 176 4 212 11 810 5 271 6 309

2 star/Lower Grade 2 79 8 155 5 119 12 367 8 218 4 96

5 star GA/Boutique B&B 10 132 1 11 1 10 1 10

4/5 star/Boutique Inn 1 12 3 46

Upper-Tier Budget 1 126 1 119 1 97

Budget 3 299 3 459 5 475 3 211 1 102

Serviced Apartments 2 51 3 99 5 128 6 79 3 77 2 18

Total City 32 1544 25 1046 23 1531 51 2845 27 1511 19 949

City Outskirts 5 star

4 star 2 136 2 252 2 186 2 118 4 377 1 59

Boutique 1 52

3 star 1 35 3 240 1 161 1 57 1 145 4 135

2 star/Lower Grade 1 35 1 21

4/5 star/Boutique Inn 1 19

Upper-Tier Budget 1 162 1 100 1 49 2 242

Budget 2 340 3 312 3 153 3 143 5 308

Serviced Apartments

Total City Outskirts 3 171 8 994 9 846 7 377 8 665 14 784

5 star 4 306 1 151 1 107 1 80

4 star 3 309 4 475 6 710 8 763 7 822 4 361

Boutique 5 221 6 219 3 141 5 187 2 102 3 122

3 star 5 192 6 416 5 373 12 893 6 416 10 444

2 star/Lower Grade 2 79 8 155 6 154 12 341 8 218 5 117

5 star GA/Boutique B&B 10 132 1 11 1 10 1 10

4/5 star/Boutique Inn 1 12 3 46 1 19

Upper-Tier Budget 1 126 1 162 1 100 2 168 1 97 2 242

Budget 3 299 2 340 6 771 8 628 6 354 6 410

Serviced Apartments 2 51 3 99 5 128 6 79 3 77 2 18

TOTAL 35 1715 33 2040 32 2377 58 3222 35 2176

33 1733


________________________________________________________________________________________



105

APPENDIX 3c

CHANGES IN HOTEL SUPPLY 2009-2015


________________________________________________________________________________________



106

APPENDIX 3c

CHANGES IN HOTEL SUPPLY 2009-2015

BATH

New Hotels

Hotel Standard Rooms Year Opened Gainsborough Bath Spa 5 star 99 2015

Halcyon Apartments Serviced Apts 8 2014

Premier Inn Bath City Centre Budget 108 2013

Hotel Extensions

Hotel Standard Additional

Rooms

Year Opened

Bailbrook House 4 star 13 2013

Hilton Bath City 4 star 23 2013

Rebranding, Repositioning and Refurbishment of Hotels The 5 star Royal Crescent underwent a £5m refurbishment in 2013 and 2014 under its new

owners Topland Group plc to restore it to one of the UK's leading luxury hotels

The 5 star Macdonald Bath Spa is currently refurbishing 2019 bedrooms in 2015

Bailbrook House underwent a £10m refurbishment in 2013 following its acquisition by Hand

Picked Hotels to reposition as a 4 star hotel

The Francis was repositioned as an MGallery boutique hotel in 2012, following a £6 million

refurbishment.

The Abbey Hotel was acquired by new owners in February 2012, who have gradually

repositioned it as a midmarket boutique hotel.

The 2 star George’s Hotel was redeveloped as The Halcyon boutique hotel in 2010 following a

£3m makeover

The 3 star Dukes Hotel has been repositioned as the Dukes boutique guest house

The Holiday Inn Express will be upgraded to the new generation Holiday Inn Express bedroom

product in 2014

The Travelodge Bath Waterside and Travelodge Bath Central have both been upgraded to

the new Travelodge bedroom product

Hotel Closures No hotels have closed in Bath over the last 6 years.


________________________________________________________________________________________



107

CAMBRIDGE

New Hotels

Hotel Standard Rooms Year Opened Premier Inn Cambridge City East Budget 120 2014

Apple Apartments Serviced Apts 14 2013

Signet Apartments Serviced Apts 9 2013

Travelodge Newmarket Road Budget 219 2013

Travelodge Orchard Park Budget 138 2011

The Varsity Boutique 48 2010

Nobleo Apartments Serviced Apts 8 2009

Premier Inn Cambridge A14 J32 Budget 154 2009

Hotel Extensions


Rooms

Additional Facilities

No major hotel extensions 2009-2015

Rebranding, Repositioning and Refurbishment of Hotels The 4 star Crowne Plaza was acquired by London & Regional in August 2012 and has been

renamed as the Cambridge City Hotel. A full refurbishment of the hotel was completed in

February 2015

The University Arms was sold in 2012 by the De Vere Group to Melford Capital Partners. It

closed in September 2014 for a major refurbishment, upgrading and expansion programme

that will see it repositioned as a landmark (possibly 5 star) hotel with 73 additional bedrooms

and a new restaurant and bar

The Gonville upgraded to a 4 star hotel (from 3 stars) in 2012

The Cambridge Quy Mill has upgraded to 4 stars

Hotel Closures The lower grade Hamilton Lodge closed in 2014, with the loss of 32 bedrooms


________________________________________________________________________________________



108

CHESTER

New Hotels

Hotel Standard Rooms Year Opened

Roomzzz Chester City Aparthotel 64 2015

Chester Apartments Serviced Apts 6 2013

Base Serviced Apartments Serviced Apts 7 2013

Oddfellows Chester Boutique 18 2011

ABode Chester Boutique 85 2010

Premier Inn Chester City Centre Budget 120 2009

Hotel Extensions


Rooms

Year Opened

Queen 4 star 87 2009

Doubletree by Hilton 4 star 43 2009

Rebranding, Repositioning and Refurbishment of Hotels The Ramada Chester was rebranded as the Mercure Chester Abbots Well in 2011

The Innkeeper’s Lodge Chester North East was rebranded as the Travelodge Chester

Warrington Road in 2009

Hotel Closures The 160-bedroom Travelodge Chester Centre Delamere Street opened in 2010 and was then

sold in 2013 for conversion to student accommodation

The Green Bough boutique hotel (15 bedrooms) was sold in 2014 for conversion to a

retirement home

The 2 star Curzon Hotel has closed (16 bedrooms)

The Comfort Inn lower grade budget hotel (31 bedrooms) closed in 2014


________________________________________________________________________________________



109

YORK

New Hotels

Hotel Standard Rooms Year Opened Judges Court Boutique 15 2015

Hotel Indigo York Boutique 101 2015

The Lawrence Luxury Aparthotel Aparthotel 15 2014

The Blue Rooms @ The Blue Bicycle Serviced Apts 6 2014

City Apartments York Serviced Apts 6 2013

Goodramgate Apartments Serviced Apts 9 2013

Clearly Apartments Serviced Apts 8 2013

Hampton by Hilton York Upper-Tier

Budget

119 2012

Grays Court Boutique 7 2011

Cedar Court Grand 5 star 107 2010

Premier Inn Blossom Street South Budget 91 2010

Hotel Extensions


Rooms

Year Opened

Best Western Monkbar 3 star 24 2014

Rebranding, Repositioning and Refurbishment of Hotels The Novotel has upgraded to 4 stars

Ramada Encore rebranded as the Travelodge York Central Mickelgate in 2010

Hotel Closures The 2 star Knavesmire (20 bedrooms) has closed for conversion back into a private residence

OXFORD

New Hotels

Hotel Standard Rooms Year Opened Vanbrugh House Boutique 22 2013

320 Banbury Road Apartments Serviced Apts 7 2013

The Bocardo Boutique 10 2012

Noa Residence Serviced Apts 12 2012

Hotel Extensions


Rooms

Year Opened

Oxford Spires Four Pillars 4 star 14 2013

Oxford Thames Four Pillars 4 star 22 2014

Rebranding, Repositioning and Refurbishment of Hotels The Old Parsonage has been repositioned as a boutique hotel

The Oxford has been taken over by The Hotel Collection - previously Puma Hotels

Hotel Closures No hotels have closed in Oxford over the last 6 years.


________________________________________________________________________________________



110

EXETER

New Hotels

Hotel Standard Rooms Year Opened Silver Springs Aparthotel 8 2013

Southlands Aparthotel 10 2013

Premier Inn Exeter M4 J29 Budget 102 2013

Hampton by Hilton Exeter

Airport

Upper-Tier

Budget

122 2013

Premier Inn Exeter St Davids Budget 102 2011

Southernay House Hotel Boutique 10 2011


Rooms

Additional Facilities

No major hotel extensions 2009-2015

Rebranding, Repositioning and Refurbishment of Hotels The boutique Hotel Barcelona reopened as The Magdalen Chapter boutique hotel in 2012


________________________________________________________________________________________


– Hotel Solutions

111

APPENDIX 3d

HOTEL GROWTH 2009-2015


________________________________________________________________________________________


– Hotel Solutions

112

APPENDIX 3d

CHESTER HOTEL STOCK COMPARISONS – HOTEL GROWTH 2009-2015 – HERITAGE DESTINATIONS

Standard Bath Oxford Cambridge York Chester Exeter Net

New

Hotels

Net

New

Rooms

%

Growth

(Rooms)

Net

New

Hotels

Net

New

Rooms

%

Growth

(Rooms)

Net

New

Hotels

Net

New

Rooms

%

Growth

(Rooms)

Net

New

Hotels

Net

New

Rooms

%

Growth

(Rooms)

Net

New

Hotels

Net

New

Rooms

%

Growth

(Rooms)

Net

New

Hotels

Net

New

Rooms

%

Growth

(Rooms

5 star 1 99 47.8 1 107 *

4 star 1 117 60.9 (1) 1 0.2 2 134 23.3 1 124 19.4 130 18.8

3 star (4) (256) (57.1) (2) (134) (26.4) (1) (100) (10.3)

Boutique 3 179 426.2 3 67 44.1 1 48 51.6 3 123 192.2 1 88 628.6 1 10 8.9

Upper-tier

Budget

15 9.8 1 122 101.7

Budget 1 108 56.5 4 631 450.7 2 239 61.4 89 33.6 2 204 99.0

2 star (1) (21) (21.0) (1) (20) (5.5) (1) (16) (6.8)

5 star Guest

Houses

1 17 14.8

Serviced

Aprtmnts

1 8 18.6 2 19 23.8 3 31 32.0 5 44 125.7 3 77 * 2 18 *

Total 3 251 17.1 4 87 4.5 8 710 42.6 10 532 20.0 3 368 20.4 6 354 25.7

Notes:

* No hotels of this standard existed in the city before 2009

Figures in brackets ( ) show a decrease in supply

Figures for new hotels and new rooms are net figures taking account of new hotel openings and rebrandings/ upgradings

Growth rates are calculated on the basis of the total hotel supply for each city (in city centre/edge of city centre and city outskirts locations)


________________________________________________________________________________________



113

APPENDIX 3e

PLANNED HOTEL DEVELOPMENT


________________________________________________________________________________________



114

APPENDIX 3d

PLANNED HOTEL DEVELOPMENT – AS AT JULY 2015

LOCATION/SITE PLANNED

HOTEL/S

STANDARD ROOMS STATUS

Bath Kingsmead House

James Street West

Apex 4 star 177 Under construction.

Due to open early

2017

Saw Close Z Hotel Budget

Boutique

148 Under construction.

Due to open 2016

South Parade Hotel Indigo Boutique 121

(54 new

rooms)

Proposed

redevelopment of

the Pratt's and

Halcyon hotels and

adjacent properties

Great Pulteney

Street

Carfax Hotel Luxury

Boutique

40 Proposed

redevelopment and

expansion of the

former temperance

hotel. Currently on

hold following

objections from

local residents

Broad Street Former King

Edwards School

Boutique 12 Planning permission

granted in 2010 and

renewed in 2013

Queen Square Francis Hotel Boutique 21 Planning permission

granted in 2012

Total Planned New Hotel Rooms - Bath 452

Additional Information

Premier Inn is looking for sites for a further two hotels in Bath

Travelodge is looking for a site for another hotel in Bath


________________________________________________________________________________________



115


HOTEL/S

STANDARD NEW

ROOMS

STATUS

Cambridge Regent Street University Arms 5 star 71 Under construction. A major

redevelopment and expansion of this

hotel is currently underway to deliver a

landmark (possible 5 star) hotel with

an additional 71 bedrooms, a new

destination restaurant, conference

facilities and a gym

CB1

Cambridge Station

Ibis Budget 231 Under construction. Hotel being

progressed as part of the CB1 city

quarter mixed-use office, apartment,

retail, leisure and transport

interchange development

Red House

Station Road

O'Callaghan

Hotel

4 star 169 Planning permission granted October

2013 for a hotel with bar, restaurant,

meeting rooms and gym

Milton Road Proposed hotel Aparthotel 133 Plans for this aparthotel were

approved at appeal in June 2015

The Forum

Addenbrookes

Crowne Plaza 4 star 198 Under construction. Hotel being

progressed as part of The Forum

development at Addenbrookes and

the new Cambridge Biomedical

Campus. Other elements of the

scheme include a private hospital,

900-seat conference centre and

postgraduate medical education

centre

North West

Cambridge

Proposed hotel 3 star 130 Hotel included as part of the North

West Cambridge university and

research quarter

Gonville Place Gonville Hotel 4 star 31 Planning permission granted for

extensions to provide an additional 31

bedrooms and a gym and spa facility

Coldhams Business

Park

Holiday Inn

Express

Upper-Tier

Budget

67 Proposed hotel extension. Planning

permission currently pending

Chesterton Road Ashley Hotel Boutique 19 Planning permission granted for an

additional 19 bedrooms and

underground car parking. It is

understood that the owners are

planning to progress the extension as

part of a scheme to reposition the

entire hotel as ca 35-bedroom

boutique hotel

Total Planned New Hotel Rooms – Cambridge 1049


Premier Inn is looking for sites for a further two hotels in Cambridge


________________________________________________________________________________________



116


HOTEL/S


Chester Lower Bridge Street Oddfellows Serviced Apts 5 Under construction.

Oddfellows boutique hotel is

currently in the process of

opening 5 serviced

apartments alongside the

hotel.

Boughton Retail Centre n/a 3/4 star 120 Waitrose received planning

permission in 2012 for a new

supermarket, hotel and bars

and restaurants on the site of

the former Boughton Retail

Centre as part of Chester’s

new Business Quarter. The

supermarket opened in

November 2014. Work has

not so far commenced on

the hotel, bars and

restaurants.

Northgate

development

Crowne Plaza 4 star 168 New hotel planned as a

replacement for the existing

Crowne Plaza

Broughton Shopping

Park

n/a Budget 80 Planning granted at appeal

in January 2015 for a hotel,

pub/restaurant and four food

units on land adjacent to

Broughton Shopping Park to

the west of Chester

Grosvenor Park Road Ibis Budget 87 Planning permission renewed

in May 2014 - first granted

Jan 2008

Hoole Doubletree by

Hilton Chester

4 star 85 Planning permission granted

in October 2013 for an

additional 85 bedrooms,

expanded restaurant and

new meeting/function rooms

Chester Zoo n/a 150 Hotel included as part of the

planned expansion of

Chester Zoo

Total Planned New Hotel Rooms - Chester 527


Premier Inn is looking for a site for another hotel in Chester.


________________________________________________________________________________________



117


HOTEL/S


York Station Rise,

York City Centre

Grand Hotel

& Spa

5 star 107 Splendid Hospitality is

planning a £15m expansion

of the Grand Hotel & Spa. It

has acquired the adjacent

Roman House office building

and has submitted plans to

double the hotel's size with

an additional 107 bedrooms.

The Chocolate Works,

former Terry’s Chocolate

Factory

n/a n/a n/a Henry Boot Developments

acquired the site in April

2013. Its plans for the site

include a hotel alongside

residential apartments,

offices and leisure uses.

Barbican Centre n/a Aparthotel

200

Hotel proposed as part of

the redevelopment of the

Barbican Centre site by

Broadhall.

Layerthorpe

City centre

n/a 124 Hotel proposed by Tiger

Developments.

York Central n/a n/a n/a The new, emerging plans for

the £1bn York Central

scheme include hotels

alongside 1,000 homes,

250,000 sq ft of offices and

shops.

Total Planned New Hotel Rooms – York 6461

Notes:

1. Allowing for 100 bedrooms at The Chocolate Works and 150 bedrooms at York

Central


Roomzzz is planning to open an aparthotel in York

York is a target for Premier Inn (for another two hotels) and Travelodge


________________________________________________________________________________________



118


HOTEL/S


Oxford Abingdon Road Travelodge Budget 83 Under construction: due to open early 2016.

Cowley Premier Inn

Oxford

Budget 63 Planning permission approved in May 2015

for 63-bedroom extension.

Cooper Callas

Building,

Paradise Street

Hotel Indigo Boutique 150 Dominvs Hospitality acquired the site in

October 2014 with a view to bringing it

forward for hotel development. A planning

application is expected in September or

October 2015

15-19 George Street n/a Boutique 43 Proposed conversion of empty offices to a

boutique hotel. Planning permission

approved April 2012.

Tyndale House,

Cowley Road

n/a Budget 66 Planning permission granted in February

2013 for the conversion of this former office

building into a hotel. Travelodge were at

one time reportedly in discussions about the

hotel.

Iffley Hawkwell

House

3 star 11 Proposed conversion of a laundry and

conference room to hotel bedrooms.

Planning permission granted February 2013

Sandford Oxford Thames

Four Pillars

4 star 20 Planning permission for a further 20

bedrooms

Oxpens, West End n/a 4 star 155 Hotel included in the plans for the

regeneration of the Oxpens site, alongside

400 homes and 10,400 sq m of office space.

A development agreement between

Oxford City Council and developer

Exemplar was signed in April 2015. Once

planning permission has been secured, work

on the scheme could commence at the

end of 2017.

Barton Park n/a n/a 120 Plans for the new Barton Park urban

extension to the north of Oxford include a

hotel alongside 885 new homes and

community facilities.

Northern Gateway n/a n/a 180 The adopted Area Action Plan for the

Northern Gateway employment

development area to the north of the city

makes provision for a 180-bedroom hotel.

Oxford Station n/a n/a 100 The Master Plan for the redevelopment of

Oxford Station and the area around it

includes the potential for a new 4-storey

hotel.

Total Planned New Hotel Rooms - Oxford 991


Premier Inn is looking for sites for a further 3 hotels in Oxford.


________________________________________________________________________________________



119


HOTEL/S


Exeter Southernay

Gardens

Premier Inn Budget 120 Under construction.

Due to open October

2015

Exeter Science

Park

n/a 4 star 150 The Science Park

developers are in

discussions with a

number of hotel

operators for the hotel

site on the Science

Park

Exeter Skypark n/a n/a 100 A hotel is proposed as

part of the Exeter

Skypark business park

development

Sandy Park n/a n/a 120 The Sandy Park rugby

stadium and

conference centre is

at the early stages of

looking at building a

hotel to enhance its

conferencing offer.

The Exeter

Development Plan

makes specific

provision for a hotel of

up to 120 bedrooms at

Sandy Park

Total Planned New Hotel Rooms – Exeter 490


Exeter is a target for Travelodge for a second hotel.


________________________________________________________________________________________



120

APPENDIX 4

BATH HOTEL DEVELOPER TESTING – SAMPLING & RESPONSE

HOTEL COMPANY/ BRAND

RESPONSE INTEREST

Accor Y Y

Apex Y *

Astu Y N

Bespoke Y Y

Beyonder Y Y

Bridge Street Y Y

Cycas N

Hilton Y Y

Hotel du Vin/Malmaison Y Y

Hyatt N

IHG Y Y

Louvre Y Y

Marriott Y Y

Moxy Y Y

Nadler Hotels Y Y

Premier Apartments Y N

Premier Inn Y Y

Rezidor Y Y

Roomzzz N

Sleeperz Y Y

Somerston N

Starwood Y Y

Travelodge Y Y

Village Y Y

Wyndham Y Y

Z Hotels Y *

* Committed scheme

BATH HOTEL FUTURES - Bath and North East Somerset · Bath Hotel Futures 2015 Hotel Solutions July...

Documents

Transcript of BATH HOTEL FUTURES - Bath and North East Somerset · Bath Hotel Futures 2015 Hotel Solutions July...