Featured Sector: Hotel & Leisure

Consumer spending in recent years has been squeezed by rising unemployment, high inflation, and low earnings growth, hitting demand for leisure facilities over the past four years hard. However market conditions are improving, with inflation falling in recent months and early signs of wage growth. The first quarter of 2014 saw a modest 2% rise in underlying project starts.

Consumer surveys have shown that the number of UK consumers who expect to have more money to spend in 12 months’ time is increasing, though on balance more still expect their situation to be worse than currently. This means that existing operators are unlikely to see a significant upturn in their fortunes in 2014, but will encourage development ready to open in 2015 when spending power is likely to have strengthened.

The prospects for the hotel sector are positive, based on improving numbers of business travellers and visitors from overseas. Competition for market share between hotel chains is expected to drive expansion in construction workloads over the next two years.