The hotel sector is an important driver for the economic growth of Glasgow, according to a new report by global real estate specialist Avison Young, with the industry supporting strong commercial and leisure demand that is expected to continue into 2020.
The report expects the city’s buoyant hotel sector to continue to grow over the next decade, as it serves diverse and increasing demand from leisure tourists, commercial sectors and conferences. With 2020 set to be a record year for Glasgow’s conference scene, the knock-on effect should see the hotel sector also enjoying a strong year.
Given this landscape, and the broad base of other commercial and leisure drivers, Avison Young expects that an overall demand growth trajectory over the next ten years will result in continued strong occupancy performance, which has been around 80% since 2014.
There are 2,200 plus bedrooms under construction and expected to be open by 2022. This growth is also supported by a pipeline of unconfirmed projects.
Avison Young also anticipates seeing a greater variety in the types of hotels being delivered, which will likely include a broader range of modern, tech and design-led properties, to better appeal to the wider demographic of visitors to the city.
Glasgow is internationally regarded as one of the world’s premier convention and events destinations, with continuous interest as a conference host city. Performance of hotels in the city has improved considerably in recent years, notably following the 2013 opening of the SSE Hydro Arena, and the Commonwealth Games and Ryder Cup in 2014.
Andrew Renouf, Director, Avison Young said: “Glasgow is undergoing a significant transformation that is raising the profile of the city and resulting in strong economic growth. The hotel sector has been a core part of this and has become a hotspot for developers, operators and investors.
“This year, COP26 will be a key contributor to Glasgow’s hotel sector and will showcase the city on a global stage, ensuring an enduring legacy. When combined with a healthy events calendar and the UEFA Euro 2020 matches, it is widely expected that 2020 will see a return to strong performance for the city’s hotel market.”
Ben Farrell, Associate Director – Investment, Avison Young, said: “Historically, hotels were perceived as alternative assets due to deal structures generally offering variable returns to investors. However, there has been a shift with hotels now very much mainstream investments and a core part of the overall Glasgow real estate evolution. Investor interest in the city remains very robust. There is now strong demand from both UK and European investors who wish to invest in high quality, well-maintained assets for a long period of time.”
Avison Young’s report was produced following in-depth research by the firm’s experts and hotel consultancy team based in the UK.