IHIF – Research by JLL's Hotels & Hospitality Group has highlighted buoyant construction levels across the sector and predicts that the trend is set to continue.

In the UK, hotel construction activity reached £2.5 billion in Q4 2016 (up 2.4% q-o-q), marking the second consecutive increase over the quarter. JLL believes that further depreciation of the pound against the dollar and euro is likely to be good news for the hotel industry, making the UK a more affordable place to visit.

According to data from STR, almost 40,000 new hotel rooms opened in Europe last year, with c. 69,000 currently under construction.

Most construction activity has been concentrated in the upper midscale segment of the market, securing around 25% of all construction projects, followed by the upscale segment at 23%. JLL predicts that this trend is set to continue.

According to JLL hotel investment volumes into the sector are also expected to rise from $20.5 billion dollars in 2016 to $22-£23 billion in 2017 across the Europe and Middle East region.

Richard Harris, Managing Director in JLL's Capital Works team, commented: "This strong construction pipeline demonstrates the strength of the sector in the face of global economic headwinds and challenges from disruptors such as Airbnb. There has been an extraordinary growth in consumers looking to discover new experiences, including choosing to rent apartments as their travel accommodation which means that hotel buildings will continue to evolve to stay at the cutting edge of travellers needs."

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.9 billion and operations in over 80 countries around the world, our more than 103,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com. 

Lauren Keith
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JLL