Hotel planning relaxations reflect industry divide

While the UK hotel sector as a whole is doing well​​, some hoteliers are struggling to run a profitable business in the face of growing branded presence and increased booking agency costs.

Simon Wells, director of hotels at Colliers International, told BigHospitality: “There are lots of hoteliers who are doing very well, but some are maybe not doing well enough. They’ve struggled through six years of terribly difficult market, and have to face other factors that make it even harder to have a profitable bottom line. A 17 per cent commission for booking agencies and 20 per cent VAT are some of the factors that make small hotels’ profitability difficult.

“In time, as we get more and more newly-built hotels going up under brands, some of the small hotels will need to find another use. That’s a simple practical reflection of the evolution of the industry, and it would be naïve to think that’s not the case.”

He added that although the hospitality industry is outperforming nearly all other parts of the economy in terms of economic recovery, some hotels are still affected by debt despite good current trading.

Planning relaxations​

The planning relaxations will allow those hoteliers to make new use out of their buildings without having to pay for planning consent – costs of £50,000 to £100,000 according to Wells, who hopes that someday the relaxations might make it easier for hotels to be converted into residential properties, for which there is much more demand.

“Demand for state funded schools is clearly limited so there are likely to only be a handful of hotels changing use nationally. To change the use of a hotel to, say, residential, is a tough, technical, long and expensive procedure. While we recognise a local authority should protect jobs and tourism, the fact remains that for some of these buildings the time has come to move on and perhaps the barriers to change are too high.

“It’s a complex picture, but this planning issue is one extra element that will help a few people. There is no harm in pushing for more change to give what is a dynamic sector in the economy some more flexibility,” Wells concluded.