Featured Sector: Hotel and Leisure

Hotels & Leisure Construction (£ million)

Underlying value of construction projects starting on site. (Excludes individual projects of more than £100 million and framework agreements).

Several factors have driven the sustained decline in the value of underlying project starts seen over the last two years. Consumer spending has been squeezed by rising unemployment, high inflation, low earnings growth and, latterly, an economy struggling under the weight of significant fiscal retrenchment. This has hit demand for leisure facilities over the past four years.

Hoteliers had previously brought forward planned projects in order to ensure their completion prior to this year’s Games, leading to a temporary hiatus in project starts

In addition the sector has seen a reduction in public sector investment such as local authority facilities, while weak consumer spending has continued to damped private sector investment.

Looking ahead, however, project starts are forecast to improve this year as investors look to benefit from firmer consumer confidence and from increased tourism in the wake of the Olympics. If past Games are a guide, hosting last year’s events should help to boost overseas visitors numbers, and related private sector investment, in 2013.