The hospitality industry is one of the largest, most dynamic and best-performing sectors in the UK economy. With an estimated 45,000 hotel rooms throughout the UK and an estimated 3.2 million or 10% of the UK workforce, there is no denying the importance of this sector to the UK. 

With such a large foothold in the UK economy and the success of the hospitality industry there is no surprise why many people, investors and developers want to make a move into this lucrative sector. If we consider the turnover of the hotel industry in the UK was recorded at £2.1 billion in 2018, significant arguments can be made regarding the potential returns that are available to developers and investors. But how do you ensure the success of a potential development in this extremely competitive field?

The current market: the drive for more hotel rooms

The UK government in their headline new tourism sector deal, have planned and committed to building 130,000 new hotel rooms by 2025. Although the UK already has a considerable tourism sector, the plan from the government is to ensure the continued growth of tourism throughout the UK. Within this, a large proportion of these new hotels room will be delivered outside of London to promote an initiative to boost visitor numbers across the country to cities such as Manchester and Liverpool. 

Such a plan is welcomed throughout the UK by developers and investors who are in the process of identifying opportunities for new large-scale hotel and hospitality developments. 

Funding and Investment 

In such a dynamic, fluid and competitive industry, securing the correct investment is vital. Although this is a common point for developments across sectors, securing the correct development finance in hospitality is even more prominent. The joys of such a fluid industry are investors are more than willing to provide financial support for large developments, diversification projects or brand investments. Without the correct financial investment, avoidable costs could spiral or simply a developer may not acquire the best or required location for a development. The level and type of funding received can have a significant impact on profits once completed.

With the increasing demand for hotel rooms across the UK, access to a range of funding opportunities will be vital in meeting the government’s proposed targets. 

Property Acquisition 

One of the most important factors in ensuring the success of a hotel/ hospitality development is the acquisition of the correct and best plot or property for the new hotel to sit. The location of a hotel, especially in a city is vital in attracting guest to an establishment. While some of the best plots of lands may be more expensive, the potential return from investment is considerable. 

The target audience of a hotel can determine where the best location of a future development may be. For example, a hotel designed for business professionals may take into account location to a conference centre or a hotel designed with tourists in mind will desire close proximity to attractions, a central location in a city or close to major transport hubs. 


Hotels provide investors with the opportunity for two distinct avenues of revenue. The first and most notable is the hotel itself providing long term income through visiting guests all year round, but this also can provide subsidiary income avenues from footfall in a wider hospitality complex. Although not all guests will want a wider experience outside of a hotel, diversifying a new or existing hotel development to including retail, leisure or health facilities (e.g. a spa) is an attractive option to developers. Diversifying a development to deliver a hospitality experience that appeals to a wide demographic at attractive price points can be one way to ensuring the success of a development.