UK construction activity in the hotel and leisure sector displayed mixed results in April 2024, with some areas seeing growth while others declined.
- Main contract awards showed a decline when compared to the preceding quarter and last year’s figures, posing questions about the sector’s investment dynamics.
- Despite the decline in awards, there was a marked increase in project starts and detailed planning approvals, potentially signalling future growth.
- The geographical distribution showed significant variance, with the North East leading in project starts, while London held the top spot for project approvals.
- Key segments within the sector, such as hotels and sports facilities, experienced differing rates of growth and decline, reflecting diverse trends across the industry.
The April 2024 overview of the UK hotel and leisure construction sector reveals a complex landscape. The sector witnessed an 11% increase in project starts compared to the preceding three months, although this was a 4% decline from last year’s performance. The total value of these newly commenced projects amounted to £713 million. Notably, there were no major new projects over £100 million, remaining unchanged from the prior quarter yet showing a decrease from the previous year.
In terms of main contract awards, there was a contraction of 3% against the preceding quarter and a more severe 13% drop compared to the previous year. These awards totalled £738 million with major projects amounting to £155 million, which was a significant improvement over the prior three months and a 55% increase from the previous year. However, underlying contract awards shrank by 14% on a seasonally adjusted basis from the previous quarter and were down 23% from the prior year.
Detailed planning approvals painted a more optimistic picture, experiencing a 52% rise in the quarter to reach £2.113 billion, albeit still 6% below last year’s total. Major planning approvals saw a substantial increase, totalling £645 million, more than five times the previous quarter’s figures, even though this was 10% down from the same period last year.
A closer examination of the sector’s components reveals varied performance. Hotels and guest houses comprised 42% of the sector’s project starts, increasing by 8% from the previous year to £299 million. Sports facilities experienced significant growth, rising by 96% to reach £184 million. Conversely, indoor leisure facilities saw a 29% decline, totalling £72 million. Cafés, restaurants, and fast-food outlets also witnessed a downturn, decreasing by 22% to £52 million, while cinema and theatre projects plummeted by 72% to £20 million.
Geographically, the North East emerged as the most active region, with project starts increasing nearly sixfold to £134 million, representing 19% of the total. The West Midlands followed closely with an 18% share, bolstered by an £80 million extension to the Belfry Hotel and Resort in Wishaw. While Northern Ireland saw a remarkable 485% increase in project starts, regions such as the South East and the East of England experienced declines, highlighting regional disparities. London held 26% of project approvals, though it saw a decrease by 26% from last year, while the South East enjoyed a 197% increase, driven by developments like the £201 million Natural History Museum Science and Digitisation Centre in Reading.
The UK’s hotel and leisure construction sector in April 2024 presented a landscape of contrasts, balancing declines in some areas with growth in others.
