OXFORD HOTEL & SHORT STAY ACCOMMODATION FUTURES Final Report Prepared for: Oxford City Council November 2007 Oxford Hotel & Short Stay Accommodation Futures CONTENTS EXECUTIVE SUMMARY.................................................................... i 1. INTRODUCTION .......................................................................1 1.1 Background to the Study........................................................................................ 1 1.2 Objectives of the Study........................................................................................... 1 1.3 Study Methodology ................................................................................................. 2 2. THE UK HOTEL SECTOR ............................................................4 2.1 National Demand Trends........................................................................................ 4 2.2 National Supply Trends............................................................................................ 6 3. CURRENT HOTEL AND SHORT STAY ACCOMMODATION SUPPLY .........................................................................................11 3.1 Hotels and Guest Accommodation.................................................................... 11 3.2 Hostels ...................................................................................................................... 18 3.3 Serviced Apartments and Self-Catering ............................................................ 18 3.4 College Accommodation .................................................................................... 19 3.5. Summary of Key Points .......................................................................................... 19 4. CURRENT DEMAND................................................................21 4.1 Hotels........................................................................................................................ 21 4.2. Guesthouses............................................................................................................ 30 4.3. Hostels ...................................................................................................................... 33 4.4. Serviced Apartments/ Self-Catering Accommodation................................... 34 4.5. College Accommodation .................................................................................... 34 4.6. Summary of Key Points .......................................................................................... 35 5. THE POTENTIAL FOR GROWTH...............................................38 5.1. The Strategic Vision................................................................................................ 38 5.2. Future Market Prospects........................................................................................ 41 5.3 Projected Future Requirements for Hotel Development ................................. 44 6. FUTURE HOTEL & SHORT STAY ACCOMMODATION DEVELOPMENT OPPORTUNITIES..................................................51 6.1. Hotel Development - City Centre........................................................................ 51 6.2. Hotel Development – Out of City Centre/the City Outskirts ........................... 53 6.3. The Impact of New Hotels .................................................................................... 54 6.4. Other Types of Short Stay Accommodation...................................................... 55 6.5. Required Hotel and Accommodation Development Sites............................. 56 7. THE DEVELOPER PERSPECTIVE...............................................59 7.1 Hotel Developer Requirements............................................................................ 59 7.2 The Nature of Hotel Investment ........................................................................... 60 7.3 Hotel and Accommodation Developer Interest in Oxford ............................. 61 7.4. Barriers to Investment ............................................................................................ 64 7.5 Site Assessments ..................................................................................................... 66 7.6 Summary of Key Points .......................................................................................... 67 8. THE FUTURE STRATEGY FOR HOTEL & SHORT STAY ACCOMMODATION DEVELOPMENT IN OXFORD – KEY ISSUES68 8.1. Key Conclusions & Considerations...................................................................... 68 8.2. The Need For New Hotels & Short Stay Accommodation ............................... 69 8.3. Traffic & Parking Issues........................................................................................... 71 8.4. The Balance Between City Centre & Out Of City Centre Development ..... 71 8.5. Site Availability........................................................................................................ 72 8.6. City Centre Hotel Development Scenarios........................................................ 73 Hotel Solutions November 2007 Oxford Hotel & Short Stay Accommodation Futures 8.7. The Impact Of City Centre Budget Hotels On Future Demand For Guest Accommodation................................................................................................................. 74 9. THE POLICY CONTEXT ...........................................................75 9.1. The Big Picture ........................................................................................................ 75 9.2. Local Policy and Development Priorities............................................................ 79 9.3. Hotel Sector Planning Policy Guidance ............................................................. 83 9.4. Future Policy Direction........................................................................................... 87 10. MOVING FORWARD...........................................................90 APPENDICES 1. UK Development Activity by the Major Hotel Brands 2. Hotels, Guesthouses, Hostels and Serviced Apartments Interviewed 3. Current Supply of Guest Accommodation 4. Former Guesthouses Granted Change of Use Permission 2004-2006 5. Current Supply of Serviced Apartments and Self-Catering Accommodation 6. College Accommodation 7. Extract from DCLG Good Practice Guide on Planning for Tourism 8. Site Assessments Hotel Solutions November 2007 Oxford Hotel & Short Stay Accommodation Futures 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 November 2007 Oxford Hotel & Short Stay Accommodation Futures EXECUTIVE SUMMARY ___________________________________________________________________________________ Introduction • The Oxford Hotel and Short-Stay Accommodation Study has been commissioned by Oxford City Council with the support of Tourism South East to provide a robust evidence base of the current and potential future demand and development potential for hotel and short-stay accommodation in Oxford through to 2026. • The catalysts for the study have been the Local Development Framework – including the Core Strategy and West End Area Action Plan. The findings will be used to inform their preparation as well as the management of hotel and other short stay accommodation investment interest. • The Study has involved the following modules of research: A review of national hotel performance and development trends; An audit of the existing supply of hotel and short-stay accommodation and assessment of recent and planned future changes to the city’s accommodation supply in terms of closures and planned developments; Interviews with managers and owners of hotels and short-stay accommodation in and around the city to assess recent and current performance levels and trends; A review of relevant policy documents and research reports; Consultations with key officers in the City Council planning, economic development, estates and tourism teams; An assessment of factors that could influence future demand for hotel and short stay accommodation, including the impact on demand of planned major development projects; The preparation of forecasts for the potential growth in hotel accommodation demand over 5, 10, 15 and 20 year periods; Consultations with a sample of hotel developers to assess their interest in developing in Oxford; A review of potential hotel development sites in Oxford. Hotel Solutions i November 2007 Oxford Hotel & Short Stay Accommodation Futures Trends in the UK Hotel Market • The UK hotel industry has steadily recovered in the last 3 years following a difficult trading period between 2001 and 2003 due to the impact of major events and crises, including the Foot & Mouth epidemic, 9/11, the Iraq War and the SARS scare. Provincial hotel performance has been more stable than for the UK as a whole, the latter being affected by London hotel performance, which has been more significantly influenced by international events. Provincial hotel occupancies have been relatively stable over the past 5 years with average annual room occupancies running at around 70-71%. Achieved room rates grew only slightly between 2001 and 2003 but have risen sharply in the last 3 years to reach a record high of £70.02 in 2006. • Both established and new hotel brands have continued to expand in the UK. The budget