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Construction in the Hotel, Entertainment and Leisure Sector Report - UK 2016-2020 Analysis

Published: 28/07/2016 / Number of Pages: 93 / Price: £745.00

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Introduction and Overview

The 7th edition of this report reviews the Hotel, Entertainment and Leisure construction market in the UK. The report focuses on the capital building programmes of leading leisure operators including hotel chains, pub companies, gaming, cinema and health club operators. Incorporating original input and primary research, it represents an up-to-date report on construction programmes within the hotel, entertainment & leisure sector, together with sector prospects into the medium-term.

Key sections covered:

  • Market overview - size, construction & fit-out programmes, capital expenditure, market structure, leading contractors and forecasts to 2020.
  • Hotels - budget, mid-range, 4* and 5* operators.
  • Health Clubs and Spas - leading operators and the rise of the budget sector.
  • Pubs, Bars, Clubs and Restaurants - expansion and refurbishment programmes.
  • Betting and Gaming - changes to the sector in light of spread of online betting and gaming.
  • Cinemas - growth of digital screens and multiplex outlets.

Key areas of insight include:

  • Expansion and investment has been largely confined to the budget hotels, health and fitness, restaurant and more recently the cinema segments.
  • Review of leisure sector capital spending - capital expenditure now stands at around £5.7bn, of which the pub sector accounts for around 22% and the hotels around 28%.
  • Review of key challenges facing leisure sector operators going forward - impact of the National Living Wage, which will impact on sector margins.
  • Going forward, there is a good pipeline of leisure sector work forecast to 2017, with a mix of theme park, resort, hotel and sports stadia in the pipeline.
  • Review of expansion and refurbishment plans by the leading operators in each sector - impact of 'Brexit' vote difficult to forecast but will affect consumer confidence.

Some of the companies mentioned in the report include:

AGM Group, Ardmore, Arora Group, BAM, Barlow Group, Barnes Construction, Beck Interiors, Bowmer & Kirkland, Bridgford, Byrne Group, BW Interiors, Buckingham Group, Carter Lauren, Chorus Group, Clegg Construction, Como, Conway Group, Galliford Try, Gilbert Ash, GMI Construction Group, Harvey Shopfitters, H G Martin, Hinton Design and Build, Integrity Refurbishment, Interserve Developments, ISG, J Wilkinson, Kier, Marshall, McAleer & Rushe, McGoff & Byrne, McLaren Construction, MJM Fit-out, Midas Construction, Morgan Sindall, Murray & Willis, North Group, Ogilvie Construction, Overbury, Phelan Construction, Portview, Revo Group, R G Carter, RLI, Russells, Seddon Construction, Sharkey, Sir Robert McAlpine, Sisk, Speller & Metcalfe, Speymill, Styles & Wood, Tolent, Wates, Watkin Jones, WFC Fit Out, Willmott Dixon.

Market Review

  • 'Leisure' market overview and size - £100+ billion market.
  • Consumer spending and value of tourism to the UK economy.
  • Growth of the budget sector and impact on key sectors such as hotels and health clubs.
  • Construction market overview, value of construction output by sector in 2011-2020.
  • Entertainment sector refurbishment and fit-out market.
  • Overview of building programmes and capital expenditure in the entertainment sector.
  • Building programmes and capital expenditure in the hotel, health clubs, betting & gaming, cinema, pub and restaurant sectors.
  • Summary overview of developments in each sector.
  • Leading contractors operating in the sector - key players, clients etc.

UK Hotel Sector

  • Market size, value and structure - key trends, forecasts up to 2020. Performance of the hotel sector in 2015-16 - room numbers, trends, forecasts to 2020.
  • Hotel construction is expected to be one of the fastest-growing sectors in 2016-17 boosted by competition between budget hotel chains.
  • Major chains and sectors within the hotel industry - Budget, Mid-Range and Luxury - market shares within each sector.
  • Detailed review of budget hotel sector - major players, shares, development plans.

Health Clubs and Spas

  • Sector overview and size - recent trends, forecasts up to 2020.
  • Leading health club operators and chains in the UK - key groups, market shares etc.
  • Budget gym operators and chains - key players, shares, development plans.

Betting, Gaming & Casino Sector

  • Sector overview and size.
  • Casinos & Gaming Halls, Bingo Halls - key players - Rank, Gala, Genting etc - Key areas of development - major programmes.

Cinemas and Multiplexes

  • Sector overview and size.
  • Development of the multiplex and digital markets - multiplex share, recent trends etc.
  • Leading operators in the cinema exhibition market - key players, market shares, development plans.

Pubs, Bars & Restaurants

  • Sector overview and size - recent trends, market restructuring etc.
  • Key pub and restaurant chains and operators - major players, market shares.
  • Industry trends in the pub and restaurant sectors.

Report Summary

The volatile nature of entertainment and leisure output in recent years saw output decline by around 5-6% in 2015. However, despite this slowdown, the outlook for entertainment & leisure construction output remains positive, if modest, with annual increases of around 2% currently forecast to 2020. Expansion and investment has been largely confined to the budget hotels, health and fitness and more recently the cinema segments, with less buoyant activity in mid-market hotels, beverage-led pubs and the gaming sectors where major operators have so far reigned in capital spending plans.

The largest sector within the UK leisure industry in terms of revenue is the food service industry. The restaurant sector has experienced strong performance over recent years, driven by a growing trend towards consumers eating out more often. The second largest sector is the 'pubs, clubs and bars' sector with 20% share of sector turnover, followed by the hotel sector. The budget sector is now the most active sector in the UK hotel industry, and over 20% hotel rooms in the UK are now estimated to be in the budget sector, which has grown at around 10% per annum in the past decade. The UK health and fitness club market has grown significantly over recent years, while the pubs and bars industry has faced difficult trading conditions and undergone significant changes in the last decade amid challenging market conditions, legislative changes, increasing operating costs, evolving customer habits and sector restructuring as a result of the economic downturn. Whilst larger pub operators with diverse portfolios have been able to take advantage of the changing market and sustain growth, these has often been at the expense of smaller operators.

The leisure and tourism industry is highly fragmented, with a number of large commercial chains dominating the hotel and pub sectors in particular, and a large number of smaller specialist operators in the restaurant, gaming and hotel and lodging sectors. The UK private health and fitness club market is highly fragmented with over 1,800 operators. In the hotel and health sectors, competition in the low cost segment has further increased, with the larger operators often taking multiple gyms in a town or city to secure their customer base, for example. This has resulted in some locations reaching saturation point, with little scope for further occupiers to enter the market.

Going forward, there is a good pipeline of leisure sector work forecast to 2017, with a mix of theme park, resort, hotel and sports stadia in the pipeline, which should drive construction growth over the forecast period. In addition, there are also a number of projects currently proposed or under discussion for the refurbishment and redevelopment of a number of sporting venues, with the larger projects likely to make a significant contribution to entertainment output into the medium-term. However, at the time of publication, the EU Referendum has just been concluded which is likely to have some adverse effect on the leisure sector. Forecasting its impact is difficult at this stage, but inevitably the uncertainty will impact on some projects being cancelled or subject to delay. In the leisure sector, many new construction projects relate to re-fit or refurbishment as hoteliers and leisure facility owners focus investment in their portfolios through refits, re-branding and refurbishment programmes to maximize growth in occupancy and maintain market share. As such there remain opportunities for refurbishment, re-branding and enhancement for the larger leisure operators. Whilst the outlook for the hotel and leisure sector is now more positive, opportunities for construction, fit-out and refurbishment work remain mixed with significant expansion plans announced by budget hotels, value gym, food-led pubs and cinema sectors contrasting with continued pressure on the mid-market hotels sector and the betting and gaming industry.


List of Report Contents

  1. Contents Listing
  2. 1. INTRODUCTION 8
  3. 1.1 BACKGROUND 8
  4. 1.2 SOURCES OF INFORMATION 8
  5. 2. SUMMARY AND FUTURE PROSPECTS 10
  6. 2.1 SUMMARY 10
  7. 2.2 MARKET PROSPECTS 11
  8. 3. ECONOMIC ENVIRONMENT 13
  9. 3.1 GDP 13
  10. 3.2 INFLATION & INTEREST RATES 15
  11. 3.3 UNEMPLOYMENT 16
  12. 3.4 HOUSEHOLD CONSUMPTION 16
  13. 3.5 HOUSING & CONSTRUCTION 17
  14. 3.6 STERLING 18
  15. 3.7 POPULATION PROFILE 18
  16. 3.8 CONCLUSIONS 19
  17. 4. CONSTRUCTION IN THE UK HOTEL, ENTERTAINMENT & LEISURE SECTOR 20
  18. 4.1 CONSTRUCTION MARKET OVERVIEW 20
  19. 4.1.1 Non-Residential Sector 21
  20. 4.2 ENTERTAINMENT AND LEISURE CONSTRUCTION MARKET 24
  21. 4.2.1 Construction Output New Work 24
  22. 4.2.2 Entertainment Sector Refurbishment and Fit Out in the UK 27
  23. 4.3 KEY SECTOR INFLUENCES 28
  24. 4.3.1 Entertainment Sector Overview 28
  25. 4.3.2 Value of Tourism to the UK 29
  26. 4.3.3 Building Programmes and Capital Expenditure in the Entertainment Sector 31
  27. 4.4 BUILDING PROGRAMMES AND CAPITAL EXPENDITURE IN THE HOTEL SECTOR 32
  28. 4.4.1 Hotel Development Pipeline 32
  29. 4.4.2 Budget Hotel Sector 35
  30. 4.4.3 Building Programmes and Expansion Plans by the Leading Hotel Chains 36
  31. 4.4.4 Hotel Construction Data 39
  32. 4.5 BUILDING PROGRAMMES AND CONSTRUCTION COSTS IN THE HEALTH CLUB AND SPA SECTOR 41
  33. 4.5.1 Building Development Programmes 41
  34. 4.5.2 Health Clubs & Spas Construction Data 44
  35. 4.6 BUILDING PROGRAMMES AND CAPITAL EXPENDITURE IN THE ENTERTAINMENT VENUES, BETTING AND GAMING SECTOR 45
  36. 4.6.1 Betting and Gaming 45
  37. 4.6.2 Building Programmes and Capital Expenditure in the Cinema Sector 46
  38. 4.7 BUILDING PROGRAMMES AND CAPITAL EXPENDITURE IN THE FOOD AND BEVERAGE SECTOR 47
  39. 4.7.1 Capital Expenditure 47
  40. 4.7.2 Building and Expansion Programmes 48
  41. 5. CONTRACTOR CAPABILITY IN THE HOTEL & ENTERTAINMENT SECTOR 51
  42. 5.1 OVERVIEW 51
  43. 5.2 SECTOR OUTLOOK 51
  44. 5.3 MAJOR PROJECTS 52
  45. 5.3.1 Sports Stadia and Venues 52
  46. 5.3.2 Hotel and Accommodation Sector 52
  47. 5.4 LEADING CONTRACTORS IN THE LEISURE, ENTERTAINMENT & HOTELS SECTOR 54
  48. 6. THE HOTEL SECTOR IN THE UK 56
  49. 6.1 STRUCTURE AND SIZE 56
  50. 6.2 VALUE OF THE HOTEL SECTOR AND KEY DRIVERS OF GROWTH 57
  51. 6.2.1 Performance of the Hotel Sector in 2015-16 58
  52. 6.2.2 Prospects for the Hotel Sector 59
  53. 6.3 LEADING SUPPLIERS TO THE UK HOTEL SECTOR 61
  54. 6.3.1 Corporate Activity 61
  55. 6.3.2 Major Chains and Sectors in the UK Hotel Sector 61
  56. 6.3.3 Budget Hotels 64
  57. 6.3.4 Mid Range Hotels 67
  58. 6.3.5 Luxury Hotels 69
  59. 6.3.6 Aparthotels/Serviced Apartments Sector 70
  60. 7. HEALTH AND FITNESS SECTOR 73
  61. 7.1 SECTOR OVERVIEW & SIZE 73
  62. 7.2 LEADING HEALTH CLUB OPERATORS IN THE UK 75
  63. 7.3 BUDGET GYM OPERATORS 77
  64. 8. ENTERTAINMENT VENUES, BETTING AND GAMING SECTOR 80
  65. 8.1 SECTOR OVERVIEW & SIZE 80
  66. 8.2 BETTING AND GAMING 80
  67. 8.2.1 Casinos and Gaming Halls 81
  68. 8.2.2 Bingo Halls 83
  69. 8.3 CINEMAS AND MULTIPLEXES 84
  70. 8.3.1 Sector Overview & Size 84
  71. 8.3.2 Development of the Multiplex and Digital Markets 85
  72. 8.3.3 Leading Operators in the Cinema Exhibition Market 86
  73. 9. FOOD AND BEVERAGE SECTOR 88
  74. 9.1 PUBS, BARS AND CLUBS 88
  75. 9.1.1 Overview 88
  76. 9.1.2 Size of UK Pub Sector 88
  77. 9.1.3 Key Players in the Pub Market 89
  78. 9.2 RESTAURANTS AND CAFES 91
  79. 9.2.1 Sector Overview & Size 91
  80. 9.2.2 Industry Trends in the Restaurant Market 93
  1. Tables & Charts
  2. TABLE 1 UK HOTEL, ENTERTAINMENT AND LEISURE SECTOR TURNOVER AND CAPITAL EXPENDITURE 2016 - BY VALUE (£BN) 10
  3. TABLE 2 GDP DATA - 2013-2016 - KEY CONSTITUENT ELEMENTS 14
  4. CHART 3 INTEREST RATES AND INFLATION (CPI) FROM 2000-2020 15
  5. CHART 4 PDI & SAVINGS RATIO AT CURRENT PRICES 2000-2020 17
  6. TABLE 5 EXCHANGE RATE FLUCTUATIONS 2012-2017 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 18
  7. CHART 6 CONSTRUCTION OUTPUT (GB) RESIDENTIAL AND NON-RESIDENTIAL SECTORS (NEW WORK & RMI) 2011 TO 2020 - BY VALUE (£BN AT CURRENT PRICES) 20
  8. CHART 7 NON-RESIDENTIAL CONSTRUCTION OUTPUT GB (NEW WORK AND RMI) 2011 TO 2020 - BY VALUE (£BN AT CURRENT PRICES) 22
  9. CHART 8 NON RESIDENTIAL CONSTRUCTION OUTPUT (GB) BY SECTOR 2015 - % BY VALUE 23
  10. TABLE 9 ENTERTAINMENT AND LEISURE CONSTRUCTION OUTPUT (PUBLIC AND PRIVATE) 2011 TO 2020 - BY VALUE (£BN AT CURRENT PRICES) 25
  11. CHART 10 ENTERTAINMENT AND LEISURE CONSTRUCTION OUTPUT AND NEW ORDERS Q1 2012 TO Q4 2015 - BY VALUE (£BN AT CURRENT PRICES) 26
  12. CHART 11 UK ENTERTAINMENT & LEISURE MARKET REVENUE BY SECTOR 2015 - % BY VALUE 29
  13. TABLE 12 UK INBOUND TOURISM - VOLUME AND VALUE OF VISITS 2005-2015 30
  14. CHART 13 CAPITAL EXPENDITURE IN THE UK LEISURE MARKET MIX BY SECTOR 2015 - % BY VALUE 31
  15. CHART 14 UK HOTEL DEVELOPMENT PIPELINE - SUPPLY BY HOTEL GRADE 2016 34
  16. TABLE 15 LEADING HOTEL CHAINS EXPANSION & DEVELOPMENT PLANS SUMMARY TABLE 38
  17. TABLE 16 UK HOTEL SECTOR CHANGES TO AVERAGE HOTEL ROOM NUMBERS 2008 TO 2016 - AVERAGE NUMBER OF ROOM AND % CHANGE 2008-16 39
  18. TABLE 17 UK HOTEL CONSTRUCTION COSTS (CONSTRUCTION, FURNITURE, FITTINGS & EQUIPMENT) PER BEDROOM BY TYPE OF DEVELOPMENT 2015 - BY VALUE (£ 000'S) 40
  19. TABLE 18 FUTURE DEVELOPMENT PLANS BY MAJOR HEALTH CLUB, SPA AND GYM OPERATORS - SUMMARY TABLE 44
  20. TABLE 19 DEVELOPMENT AND CONSTRUCTION COSTS OF SPORT AND LEISURE FACILITIES Q2 2016 - BY AREA AND CAPITAL COSTS (£ 000'S) 45
  21. TABLE 20 UK BETTING AND GAMING SECTOR LEADING OPERATORS AND DEVELOPMENT PLANS 46
  22. TABLE 21 UK CINEMA SECTOR LEADING OPERATORS AND DEVELOPMENT PLANS 47
  23. TABLE 22 UK FOOD AND BEVERAGE SECTOR LEADING OPERATORS DEVELOPMENT PLANS 2016-2020 50
  24. TABLE 23 LEADING CONTRACTORS WORKING IN THE HOTEL, LEISURE & ENTERTAINMENT SECTOR - CAPABILITY, EXPERIENCE, KEY CLIENTS ETC 55
  25. TABLE 24 UK HOTEL SECTOR NUMBER OF HOTELS AND GUEST HOUSES BY STAR RATING 2016 56
  26. CHART 25 TURNOVER IN THE UK HOTEL SECTOR - 2010 TO 2020 - VALUE (£BN) 57
  27. TABLE 26 UK HOTEL SECTOR INDICATORS OF OCCUPANCY AND REVENUE (LONDON AND THE REGIONS) 2013 TO 2016 59
  28. TABLE 27 UK HOTEL MARKET - LARGEST OPERATING COMPANIES 2015-16 - BY NUMBER OF HOTELS, ROOMS & MARKET SHARE (%) 63
  29. CHART 28 GROWTH OF THE UK BUDGET HOTEL SECTOR 1995 TO 2016 - BY NUMBER OF ROOMS 65
  30. TABLE 29 BUDGET HOTEL SECTOR - TOTAL SUPPLY 2005, 2010, 2014 AND 2016 (EST) - BY NUMBER OF HOTELS AND ROOMS AND AVERAGE NUMBER OF ROOMS PER HOTEL 65
  31. TABLE 30 TOP 20 UK BUDGET HOTELS LEADING BRAND PORTFOLIOS AND MARKET SHARE - BY NUMBER OF HOTELS AND NUMBER OF ROOMS 67
  32. TABLE 31 UK TOP 20 MID-RANGE HOTEL GROUP BRAND PORTFOLIOS 2016 - BY NUMBER OF HOTELS AND ROOMS 68
  33. TABLE 32 UK TOP 15 LUXURY HOTELS LEADING BRAND PORTFOLIOS 2016 BY NUMBER OF HOTELS AND NUMBER OF ROOMS 70
  34. TABLE 33 LEADING APARTHOTEL/SERVICED APARTMENT PROVIDERS IN THE UK BY NO. HOTELS AND ROOMS AND PIPELINE DATA 2016 72
  35. CHART 34 UK HEALTH AND FITNESS MARKET NEW CLUB OPENINGS 2010 TO 2015 - BY NUMBER OF CLUBS 74
  36. TABLE 35 TOP 20 PRIVATE HEALTH CLUB & FITNESS BRANDS/OPERATORS 2016 - BY NO. CLUBS 75
  37. CHART 36 BUDGET GYM SECTOR - MARKET SHARES (%) OF THE LEADING OPERATORS IN 2015 BY NO. OF GYMS 78
  38. TABLE 37 LEADING UK BUDGET GYM OPERATORS 2016 - BY NO. CLUBS 79
  39. TABLE 38 UK LEADING CASINO OPERATORS MARKET SHARES 2016 - % BY NUMBER OF VENUES 82
  40. TABLE 39 UK BINGO HALL SECTOR LEADING OPERATORS AND MARKET SHARE 2016 - % BY NUMBER OF VENUES 83
  41. TABLE 40 GROWTH OF THE UK CINEMA MARKET 2011 TO 2015 - BY TURNOVER, NUMBER OF SITES, NUMBER OF SCREENS & ADMISSIONS 84
  42. TABLE 41 UK CINEMA SCREENS AND SITES BY TYPE (MULTIPLEX/TRADITIONAL 2011 TO 2015 - NUMBER AND % OF MULTIPLEX SCREENS AND SITES 85
  43. TABLE 42 UK CINEMA SECTOR BY SCREEN TYPE (DIGITAL/TRADITIONAL) 2009 TO 2015 - NUMBER OF SCREENS AND DIGITAL SCREENS AS % OF TOTAL SCREENS 86
  44. TABLE 43 LEADING CINEMA EXHIBITION OPERATORS 2016 - UK MARKET SHARES (BY NO. SITES AND SCREENS) 86
  45. CHART 44 TURNOVER IN THE UK PUB SECTOR 2009 TO 2015 - BY VALUE 88
  46. TABLE 45 LEADING PUB OPERATORS BY PROPERTY PORTFOLIOS 2014 AND 2016 - MARKET SHARES BY NUMBER OF PUBS 90
  47. TABLE 46 TOP UK RESTAURANT OPERATORS AND BRANDS 2016 - BY NUMBER OF OUTLETS 93

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