London hotel sector outpacing the rest of the UK

London could prove to be the UK's biggest source of new hotel jobs as according to industry experts market growth in the capital is far outperforming the rest of the country.

A survey of almost 100 senior hospitality figures conducted by Deloitte ahead of its 24th annual European Hotel Investment Conference revealed that 41 per cent think that hotels outside the capital could take up to five more years to recover to their pre-recession peaks in terms of profitability.

Almost one in five (19 per cent) believe it will take longer, whilst a third (35 per cent) anticipate it will take up to three years.

The hotel market in the south-east (excluding London) is expected to recover more quickly than the rest of the UK, with over half (54 per cent) of respondents envisaging that it will be back to pre-recessions levels within three years.

However, the market in London seems to be operating almost entirely independently to the rest of the UK and has in fact thrived since 2008, with revenue per available room (RevPAR) currently well ahead of its pre-2008 peak. 

Nick van Marken, global head of hospitality at Deloitte, explained that while regional hotel performance is closely linked to the health of the domestic economy, with a close correlation between RevPAR and GDP, this is not the case with London.

"London is an established international gateway. As a cultural, economic and political hub, the city enjoys a pre-eminent position both domestically and internationally, contributing to robust market performance and a thriving investment market," he said.

Outside of the capital, the concern is that unless volume returns, hoteliers are unlikely to be able to increase their average rates.

"The consequences of this are already all too evident, with a significant erosion of the bottom line and little sign that an improvement in profitability will be seen for some time," said Mr van Marken.

Ultimately, this could end up affecting those looking for hospitality jobs in the hotel sector by deterring investment in new hotels outside of London, and so curtail the number of new jobs being created.

Deloitte's research showed that, while eight per cent of respondents to the survey believe financing is hard to obtain in London, it remains the major issue outside the capital.

In fact, over half (52 per cent) of those polled said it is still impossible to secure financing for any projects in regional UK.

As such, job seekers may need to be prepared to look towards the capital when looking for hotel job opportunities.

"Barring any global demand shocks, London should continue to be a highly attractive investment market with high barriers to entry," said Mr van Marken.

However, that does not mean that there are no job opportunities in the hotel sector outside of London altogether, as there are signs that certain sections of the market are thriving.

Branded budget hotels in particular are doing well, as customers look for value for money during a time in which many are finding their finances increasingly under pressure.

For example, September this year saw Premier Inn announce it has secured six new hotel sites in the south-west of England and South Wales, with work underway on another nine.

This will add 1,140 new rooms to the brand's portfolio as well as create 750 new jobs.

Other large hotel groups, including the likes of InterContinental, Travelodge and Accor, have all opened or announced the opening of new UK hotels outside of London this year.

Mr van Marken also believes regional hotel investment could pick up in the near future.

"We may see more regional portfolio deals coming to market and certainly several possible transactions are being mooted," he commented.