Publication

Spotlight: The UK Extended Stay Report Winter 2016/17

Operator confidence and appetite for expansion improves in the face of operational headwinds

Summary

■ Operational conditions in London have been challenging over 2016, but operator confidence has improved over the second part of the year.

■ Greater optimism is being reflected in operators expansion plans. The latest ASAP/Savills operator survey noted an increase in operators who are accelerating expansion plans.

■ 2017 will be a record year for new development in the UK with just over 2,600 units forecast to be delivered, a 13.8% increase on current stock.

■ There may be some short lived absorption issues in certain markets next year, as expected at this early stage in the sectors evolution.

■ The longer term fundamentals of the sector remain robust and we expect RevPAR growth to remain in positivity territory in 2017.

■ Institutional investors have stepped up forward funding activity, driven by improving investor appetite and lack of purpose built stock for acquisition.

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