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Surrey Hotel Futures

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Surrey Hotel Futures SURREY HOTEL FUTURES FINAL REPORT Prepared for: Surrey County Council August 2015 Surrey Hotel Futures Study 2015 __________________________________________________________________________________________ CONTENTS EXECUTIVE SUMMARY .................................................................................................................................. i 1. INTRODUCTION ................................................................................................................................... 1 1.1. Study Background and Brief................................................................................................... 1 1.2. Scope of the Study ................................................................................................................... 2 1.3. Methodology ............................................................................................................................. 4 2. NATIONAL HOTEL TRENDS ................................................................................................................ 6 2.1. National Hotel Performance Trends ...................................................................................... 6 2.2. National Hotel Development Trends .................................................................................... 8 3. SURREY HOTEL SUPPLY ..................................................................................................................... 19 3.1. Current Surrey Hotel Supply .................................................................................................. 19 3.2. Customer Satisfaction with Surrey Hotels ........................................................................... 25 3.3. Current Hotel Supply in Surrounding Areas ....................................................................... 25 3.4. Recent Hotel Development and Changes in Supply ...................................................... 26 3.5. Planned Hotel Development ............................................................................................... 35 4. CURRENT HOTEL PERFORMANCE & MARKETS ............................................................................. 43 4.1. Occupancy, Achieved Room Rates and Revpar ........................................................... 43 4.2. Patterns of Demand ............................................................................................................... 47 4.3. Market Mix................................................................................................................................ 49 4.4. Insight into the Key Markets for Surrey Hotels .................................................................... 52 4.5. Market Trends .......................................................................................................................... 59 4.6. Denied Business ....................................................................................................................... 61 4.7. Prospects for 2015 ................................................................................................................... 63 5. FUTURE MARKET PROSPECTS ........................................................................................................... 64 5.1. Strategic Context – The Surrey Growth Agenda .............................................................. 64 5.2. Major Projects that Will Drive Growth in Hotel Demand ................................................. 76 5.3. Future Growth Prospects by Market ................................................................................... 86 6. THE HOTEL DEVELOPER PERSPECTIVE ............................................................................................ 90 6.1. The Climate for Hotel Investment ........................................................................................ 90 6.2. Hotel Business Models & Funding Routes ........................................................................... 92 6.3. Hotel Developer Interest in Surrey ....................................................................................... 96 7. CONCLUSIONS AND RECOMMENDATIONS ..............................................................................103 7.1 Hotel Development Opportunities and Needs ..............................................................103 7.2. Planning Policy Implications ...............................................................................................112 7.3. Accelerating Hotel Development - Requirements for Public Sector Intervention...118 7.4. Supporting the Surrey Hotel Industry .................................................................................121 7.5. Moving Forward – Next Steps .............................................................................................126 7.6. Concluding Thoughts...........................................................................................................128 Hotel Solutions August 2015 Surrey Hotel Futures Study 2015 __________________________________________________________________________________________ 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] Hotel Solutions August 2015 Surrey Hotel Futures Study 2015 __________________________________________________________________________________________ EXECUTIVE SUMMARY __________________________________________________________________________________________ 1. Study Objectives and Purpose • The Surrey Hotel Futures Study has been undertaken by Hotel Solutions between October 2014 and August 2015 for Surrey County Council. The study seeks to provide an in depth analysis of the future opportunities and requirements for hotel development across Surrey to inform the future plans and policies of the County Council and its District and Borough Council and LEP partners in terms of the tourism strategy for the county, hotel planning policies as part of the future review and updating of Local Plans, and potential other public sector interventions to support and accelerate hotel development across the county. 2. Current Hotel Supply • Surrey has a current supply of 119 hotels with 7,746 letting bedrooms. • The county's hotel supply is predominantly a mix of 3 star, budget, and to a lesser extent 4 star hotels. Surrey also has a number of luxury destination country house and golf hotels, particularly on the western side of the county. It has a number of small, lower grade hotels, especially in Horley, catering for the Gatwick Airport market. Surrey has a very limited supply of boutique hotels. In addition to hotels there are supplies of serviced apartments in some of Surrey's larger towns that compete to at least some extent in the hotel market. • Surrey's 3 star hotel supply comprises predominantly small, independent 3 star hotels spread across the county's key towns. The county only has 3 large branded full service 3 star hotels and one limited service 3 star/ upper-tier budget hotel. Many of Surrey's small, independent 3 star hotels have seen little recent investment and appear to offer a somewhat tired and dated product. A number have been trading in administration in the last few years, but most now look set to see investment following acquisition by new owners. • Most towns in Surrey now have at least one budget hotel - either a Travelodge and/or a Premier Inn. • Most of the independent hotels in Horley offer a fairly basic standard of accommodation. Three hotels serving the Gatwick market are currently receiving significant numbers of 'Terrible' ratings on Tripadvisor. Customers otherwise appear to be largely satisfied with the hotels in this part of the county. Hotel Solutions i August 2015 Surrey Hotel Futures Study 2015 __________________________________________________________________________________________ • Most of Surrey's towns have fairly similar numbers of hotel bedrooms. Towns with more significant hotel supplies are Horley, Guildford, Woking, Weybridge, Epsom and Camberley. Larger towns with limited or no hotel provision are Esher (which has no hotels currently), Leatherhead, Redhill, Reigate, Caterham, Walton-on-Thames and the suburban areas of Ashford, Ewell and Molesley. 3. Recent Hotel Development & Changes in Supply • Surrey has seen a significant increase in budget hotel provision in the last 10 years, with the opening of 14 new budget hotels. Since 2005 the county has also seen the opening of a 4 star Marriott golf hotel at Lingfield Park racecourse; a small luxury hotel at Kingswood Golf Club at Tadworth; two 4 star hotels (in Guildford and Weybridge); a 3 star limited service Holiday Inn Express hotel at Epsom Downs racecourse; and a boutique inn at Claygate. Thorpe Park also opened the Thorpe Shark themed hotel in 2014, following a successful trial of a temporary hotel (The Crash Pad) in 2013. • Key focal points for new budget hotel openings have been Camberley, Sunbury and Woking. Guildford has been another focus for hotel development, with the opening of a new Travelodge in 2005 and the 4 star Radisson Blu Edwardian in 2011. • A number of Surrey's existing hotels have been refurbished and upgraded in the last 10 years and a few have added bedrooms. Two hotels in Guildford have repositioned as boutique hotels. The former 4 star Renaissance Gatwick Airport Hotel at Horley became
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