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Sport, Travel & Leisure / REPORT INFORMATION

Building Insight for Construction in the Hotel & Leisure Sector
Date	Dec, 2006
Pages	109
Price / format	$1250 / Online Download

$1 250

Report Information | Custom-Tailored Research | Product Trade Lead

Abstract:
Countries covered: United Kingdom

AMA Research have published a brand new, first edition ‘Building Insight for Hotel & Leisure Construction & Refurbishment’ report which is available to purchase immediately:-

The Building Insight for Hotel & Leisure Includes:

An overall review of the UK construction industry with estimated forecasts.

Detailed assessment of leisure new build construction output and RMI, together with estimated forecasts for growth over the next few years.

Review of the structure and size of all sectors within the leisure market (hotels, pubs, restaurants, gaming & betting, cinemas, health clubs) together with projections for growth over the next few years.

Detailed analysis of the key leisure sector chains and operators, together with current and projected estate portfolios.

Explores the shift in emphasis on development back into town centres from out of town locations and the growing trend towards regeneration and mixed use retail/residential developments.

Areas of Particular Interest Include:

Analysis the key drivers of capital investment including tourism levels, impact of the 2012 Olympics in the UK and leisure sector consolidation which has seen many of the large pub and hotel chains undertaking significant expenditure on the conversion and re-branding of their portfolios.

In-depth review the capital investment and construction programmes of leading leisure sector operators and chains together with their proposed future expansion plans.

Explores the impact of the new 2005 Gambling Act on expansion within the gaming and casino sector.

Analyses changes in the leisure sector such as the increasing popularity of the ‘short breaks’ market and the conference market on the growth of the budget and luxury hotel sectors.

Impact of PPG6/PPS6 - explores how recent changes to the planning system, through PPS6, have changed the nature of the leisure construction market slowing out-of-town development.

Analyses issues affecting leisure construction including planning laws, sustainability in leisure construction, the impact of government legislation on smoking, alcohol licensing, disabled access, gaming and the proposed ‘bed tax’ and the increasing use of modern methods of construction such as lean construction, supply chain management and pre-fabricated building

Key areas of coverage in the report include:-

LEISURE MARKET IN THE UK

Value and size of the leisure market in the UK.

Consumer spending levels and the impact of consumer confidence on the leisure market.

Value of tourism to the UK economy.

Leisure sectors - hotels, health clubs, betting & gaming, cinemas, pubs, clubs & bars, restaurants & cafes - market size and structure, leading chains.

Mixed use developments - key leisure sector led developments.

LEISURE CONSTRUCTION MARKET

Value of Total Construction New Work Output in the United Kingdom.

Forecasts for construction output beyond 2006.

Value of Repair, Maintenance and Improvement (RMI) market.

Leisure Construction Market - value of new build output with projections beyond 2006.

Leisure Refurbishment Market - market size with projections beyond 2006.

Capital Expenditure in the Leisure Sector - current values and projections beyond 2006.

Capital expenditure levels of the leading leisure operators and chains.

Building programmes and expansion plans of the leading leisure operators and chains.

Leading contractors in the leisure construction sector.

FACTORS AFFECTING THE LEISURE CONSTRUCTION MARKET

The impact of planning policy on leisure development - PPG6/PPS6 encouraging development back into town centres away from out of town locations.

Amendments to the Government’s planning use classes governing casinos.

The impact of major Government legislation on the leisure sector including disabled access, smoking, alcohol licensing, gambling, the proposed ‘bed tax’ and the application of the building regulations.

Environmental concerns in leisure sector construction including sustainable construction. Includes examples of environmental initiatives of the major leisure chains.

Use of Modern Methods of Construction (MMC) in leisure construction including prefabricated buildings and prefabrication pods used heavily in the hotel sector.

Additional Information

The Leisure sector has experienced a good year for capital expenditure investment with the pubs and bars and hotel sectors in particular investing substantial sums on re-branding and refurbishment programmes and driving growth in the sector.

Total estimated capital expenditure in the leisure sector as a whole was around £5.9 billion in 2006, with the pub sector accounting for around 26% and the hotel sector around 30%. In 2005, contractors’ output from new leisure sector construction work totalled £2.9 billion, a decline of almost 6% on the previous year. In the same year, leisure construction accounted for around 5% of total new work obtained by contractors in the UK and around 17% of all commercial new work obtained by contractors.

The immediate outlook for leisure construction remains fair in 2006 with growth of around 5% expected for the year, but a slight slowdown in output is expected in 2007 and 2008 due to lower levels of consumer spending. Output is expected to remain at around 4% in 2007 and 5% in 2008 to reach an estimated output level of around £3.3 billion in 2008.

Those sectors that are expected to benefit from improved construction output, within the leisure industry include the gaming and casino sector, driven by legislation allowing for 17 new casinos from 2007, mid-market restaurants and pubs, bars and mixed-use leisure schemes in town and city centres.

Looking further ahead, the 2012 London Olympics are expected to give UK tourism a massive boost both in the run up to the Games and also in the years that follow, due to the ‘Legacy’ phase which will see the development of improved sporting, leisure and community facilities. Furthermore, a substantial amount of capital expenditure is expected to be invested in the serviced accommodation and hospitality sector in order to bring hotels and facilities up to the international standard expected by incoming tourists.

Leading contractors picking up the bulk of retail sector work are Balfour Beatty, Kier, ISG, Morgan Sindall, Pearce Group, Alfred McAlpine, HBG, Shepherd Construction, Bowmer & Kirkland, Multibuild, Sir Robert McAlpine and Midas Construction.

Revenue from the UK tourism and leisure industry passed £100 billion for the first time in 2006 and was estimated to be worth around £102.6 billion, around £20 billion more than in 2005. The largest sector within the UK leisure industry in terms of revenue is the betting and gaming industry (including revenues from casinos), with revenues reaching approximately £35 billion in 2006, followed by ‘out of home’ drinking in pubs, clubs and bars, valued at around £23 billion, of which the pub sector accounted for £16.9 billion.

Despite global tourism being badly affected by 9/11, the 2005 London bombings, foot and mouth disease in 2001, SARS and the Iraq War of 2003, there have been signs of a recovery in 2005/06. Tourism is a long-term growth industry that will be worth well over £110 billion in 2010. Looking further ahead, the 2012 London Olympics are expected to give UK tourism a massive boost both in the run up to the Games and also in the years that follow, due to ‘Legacy’ phase which will see the development of improved sporting, leisure and community facilities.

Recent market growth in leisure construction output has been driven by a slight recovery in the tourism sector, especially in London and the major business and conference destinations such as Birmingham, Manchester and Leeds and cultural and leisure destinations such as, Bath, Cardiff and Edinburgh. Furthermore, there have been increased levels of capital expenditure on refurbishment programmes in key end-use sectors e.g. pub, bars and restaurants, betting and gaming, and the hotel sector.

The fluctuations experienced in the hotel and travel industry over the past few years have impacted upon new build construction in the sector, with the mid-range category most commonly affected due to lower levels of demand and lower occupancy levels. Many of the major chains have been more inclined to defer new build projects until the outlook has stabilised. However, the majority of chains typically have programmes of renewal or upgrade on average every 5 years or so, which has maintained steady growth in the hotel refurbishment sector and offset any decline in new build construction.

Increasing occupancy levels in the hotel sector, with demand outstripping supply and a lack of long-term under-investment in building stock is also helping to underpin construction opportunities in the UK hotel sector.

Although investment in new build hotel construction continues, it tends to be focused around certain sub-sectors. The market for boutique or ‘lifestyle’ hotels, for example in the luxury or deluxe sector, continues to grow, with lifestyle operators planning to develop around 5,000 rooms in the UK to 2011. Furthermore, since 2004, the luxury hotel sector has seen higher room rate growth than any other segment, including budget hotels. In response to changing travel patterns and consumer trends, such as the increase in demand for luxury accommodation and facilities and the rise of the short breaks market, hoteliers are increasing raising their standards and introducing new brands. With room rates currently experiencing growth, development in niche markets such as boutique and luxury hotels continues to be sustained, with these sectors able to command premium rates and hotel chains announcing new brands.

Capital expenditure levels in the hotel sector remains buoyant, with clients expected to spend in excess of £2 billion on new build schemes programmes over the next 3 years. This is in addition to the ongoing programme of refurbishment carried out in the sector by most chains, with around 20% of bed-stock renovated per year. Total capital expenditure in the hotel sector is currently running at around £1.8 billion, of which the top 10 chains account for around 61% (£1.1 billion).

Among the UK’s 58,000 pubs and bars, high street provision has reached saturation point in some areas and the sector is under constant pressure to evolve, driven by competition, consumer demand and recent legislative change. Consumer spending in the pub, club and bar sector is worth around £23 billion, of which the pub sector accounts for around £16.9 billion. Pub and club sector capital expenditure currently accounts for around £1.5 billion or 26% of total capital expenditure in the UK leisure sector. In 2007, a slight increase in capital expenditure of around 2% from £1,560m in 2006 to £1,591m in 2007 is expected in the pub sector, underpinned by interior refurbishment programmes of a number of major chains as they begin to incorporate and upgrade the portfolios of recent acquisitions, such as Punch Tavern’s recent purchase of 1,800 pubs from the Spirit Group.

The industry has yet to experience any significant impact due to the new 24 hour licensing regime and the gradual phasing in of smoking bans, both of which add further challenges for owners and developers of premises. The biggest challenge facing the sector going forward is undoubtedly the smoking ban, with older, inner city pubs expected to suffer the most. However, many pubs are expected to benefit from being smoke-free and take advantage of this by way of an increased food offer. For example, many town centre pubs may now decide to serve breakfast in the morning, more formal lunches for the business market and late night food, music and entertainment.

After several years of new build expansion, private health and fitness club operators have recently become more focused on refurbishing existing premises rather than new roll-outs, due to the low availability of suitable premises and a certain level of maturity within the sector. In 2005, there was a decrease in the number of private sector clubs, underpinned by a lack of investment into the market and the decision by many operators to scale down and focus on improving the performance of existing clubs, with a number of companies undertaking refurbishment and reconstruction. It is unlikely that there will be any significant construction activity in the health and fitness club sector in the short to medium term, with club openings currently standing at around 60 per year, less than half the level seen in 2000.

The gaming industry remains relatively buoyant with technological and regulatory changes driving demand. Developments in the UK gaming industry continue to be driven by the impact of legislation and medium-term growth in the sector is expected to be driven by deregulation of the industry in the UK, in view of the complete implementation of the 2005 Gambling Act in September 2007, as well as in the overseas markets.

The overall size of the casino market is expected to grow significantly after deregulation, with casino and bingo operators the main beneficiaries, with more opportunity to expand, introduce unlimited stakes and prizes and openly compete with other forms of leisure activities.

Construction activity in the betting and gaming sector should also be buoyant as deregulation removes restrictions on the development of bingo halls and casinos. New market entrants to the gaming sector such as hotels, pubs or large leisure venues will also be attracted by the growth opportunities provided by the new legislation including operators where part of their space could be converted to gaming. In addition to the 17 casinos planned for 2007 under the new Act, deregulation is also likely to lead to an increase in new outlets, both new build and conversions, as major operators attempt to secure gaming licences before the Gambling Act comes into force.

In the cinema sector, a 51% rise in the number of multiplex screens since 1999, compared to a 20% decrease in the number of traditional and mixed-use screens, and the prevalence of out of town developments, has led to a general decline in town centre locations. Capital expenditure in the cinema sector is relatively small at just £15m per year, much of which is likely to be either in refurbishment and modification or in the installation of new digital equipment in the 250 screens and 150 cinemas across the country.

Developers in the cinema market are also focussing on plans to utilise under-used space at existing cinemas, with various initiatives including premium screens, bars, restaurants and cinema-themed merchandising and retail. Other issues that may impact on growth include are the roll-out of digital cinema, high definition DVDs and online rental.

Table of contents:

1. Introduction
2. Executive Summary
3. Economic Environment: 3.1 Gdp; 3.2 Inflation & Interest Rates; 3.3 Unemployment; 3.4 Household Consumption; 3.5 Housing & Construction; 3.6 Sterling; 3.7 Population Profile; 3.8 Conclusions
4. The Leisure Sector In The Uk: 4.1 Market Overview And Size; 4.2 Value Of Tourism To The Uk; 4.3 Market Trends And Threats; 4.4 The Hotel Market; 4.5 Health Clubs & Spas; 4.6 Betting & Gaming Sector; 4.7 Cinemas And Multiplexes; 4.8 Pubs, Bars And Clubs; 4.9 Restaurants And Cafes
5. Leisure Construction In The Uk: 5.1 Construction Market Overview; 5.2 Leisure Construction Market; 5.3 Capital Expenditure And Building Programmes In The Leisure Sector; 5.4 Mixed Use Development
6. Contractor Capability In The Retail Sector: 6.1 Structure Of The Contracting Industry In The Uk; 6.2 Leading Construction Contractors In The Leisure Market
7. Factors Affecting Leisure Construction: 7.1 Overview; 7.2 Planning Laws; 7.3 Other Legislative Requirements; 7.4 Sustainable Construction In The Leisure Sector; 7.5 Pre-fabrication & Modern Methods Of Construction (Mmc) In The Leisure Sector
8. Future Prospects
Charts And Tables: Table 1 Value Of The Uk Leisure Sector To The Economy & Construction Industry 200; Chart 2 Interest Rates And Inflation (Cpi) From 1990-200; Chart 3 Pdi & Savings Ratio At Current Prices 1990-200; Table 4 Exchange Rate Fluctuations 2000-2007 - Sterling To The Dollar, And The Euro, Spot Rates; Chart 5 Age Distribution Of The Resident Uk Population 2001 (‘000); Chart 6 Uk Leisure Market - Revenue By Sector (£ Billion) 200; Table 7 Uk Inbound Tourism -volume And Value 2001-201; Table 8 Uk Hotel Sector - Number Of Star Rated/Group Owned Hotels As At September 200; Chart 9 Turnover In The Uk Hotel Sector - 2000 - 2010 (£ Billion); Table 10 Uk Hotel Sector - Performance Indicators (London & Provinces) January-july 200; Table 11 Uk Budget Hotels - Leading Brand Portfolios By Number Of Rooms; Table 12 Uk Mid-range Hotels - Leading Brand Portfolios By Number Of Rooms; Table 13 Uk Luxury Hotels - Leading Brand Portfolios By Number Of Rooms; Chart 14 Health & Fitness Market - New Private Sector Club Openings 2000-200; Table 15 Major Uk Hotel Spa Brands 200; Table 16 Leading Private Health & Fitness Club Brands And Operators 200; Table 17 Leading Casino Operators 200; Table 18 Growth Of The Uk Cinema Market 2000-200; Chart 19 Uk Cinema Screens By Location 200; Table 20 Cinema Screens By Type Of Building 1999 - 200; Table 21 Leading Cinema Exhibition Operators 200; Chart 22 Turnover In The Uk Pub Sector 2000 -200; Table 23 Leading Pub Operators By Property Portfolio 200; Table 24 Top 10 Restaurant Operators - 200; Chart 25 Value Of Construction Output New Work 1998-2008 (£ Billion); Chart 26 Value Of Construction Output New Work By Sector - % By Value 200; Table 27 Rmi Work Output - 2005 (£m); Table 28 Leisure Sector Work - Contractors Output 2000 - 2010 (£m); Table 29 Leisure Sector Rmi Work - Contractors Output 2002 - 2010 (£m); Chart 30 Capital Expenditure In The Uk Leisure Market - By Sector 200; Table 31 Capital Expenditure & Expansion Plans Of Leading Hotel Chains; Table 32 Hotel Development Pipeline - Total Estimated New Build Hotels & Rooms By 201; Table 33 Uk Hotels - Change In New Build Size (By Average No. Rooms) 2002-200; Table 34 Uk Hotels - Construction Costs By Type Of Development - £m - (2004 Prices); Table 35 Capital Expenditure & Expansion Plans Of Leading Health Club Operators; Table 36 Uk ‘super’ Casino - Short Listed Bids; Table 37 Capital Expenditure & Expansion Plans Of Leading Casino Operators; Table 38 Capital Expenditure & Expansion Plans Of Leading Pub Chains; Table 39 Principal Mixed-use Schemes In Development - 200; Table 40 Main Private Contractors - By Number Of Employees 200; Table 41 Leading Contractors’ Share Of Leisure Sector Construction Work In 2005 (£m)

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