Staycationers flocking to Swansea a boost for local hotels

A new report by commercial real estate experts Colliers says pressure for accommodation is starting to outstrip supply and there's enough demand for three new hotels in the city in the next few years.

The report also shows that since the pandemic Swansea has been the fifth fastest-growing destination in the UK for hotel visits, competing well with places like Bath and Belfast.

The in-depth study of Swansea by industry insiders Colliers Hotels & Resorts Consulting team says the transformation of the city, including the new Swansea Arena, is creating so much demand from leisure and business travellers that three new hotels could be needed by 2026.

Robert Francis-Davies, Cabinet Member for Investment, Regeneration and Tourism, said: "Swansea, as we know and can see, is going through a huge regeneration phase and we were keen to see how this was impacting on various sectors.

"We selected Colliers' to undertake this study, because of the significant experience that they have had in this field both in the UK and internationally. We are delighted by the results from this study as it shows that there's been a major bounce-back for the hotel industry in Swansea, with demand for accommodation now higher than it was before the pandemic.

"Thanks to our amazing beaches, countryside exciting calendar of events and growing list of visitor attractions - with more to come - Swansea's competing successfully with Edinburgh, York and Oxford for staycationer attention.

"Swansea supports more than 5,000 jobs in its tourism economy so it's good news that demand for rooms is rising because people staying at hotels traditionally spend more money as well as time here.

"This report shows that now the pandemic is behind us, Swansea's hotel businesses are doing well and the industry would benefit from further investment here.

"We've already earmarked a location next door to the arena for a new hotel and Colliers' report is a valuable message to any hotel chain that Swansea is a good place to do business."

Its in-depth study of Swansea, commissioned by the council, shows that the transformation of the city and its future prospects is pushing up current hotel occupancy rates and driving demand for more rooms in the years ahead.

Some of its key findings:

• Analysis suggests supply has not kept pace with a growing demand and the market in Swansea is currently undersupplied. The latest opening of a major hotel was in 2010.
• Occupancy is high annually - currently almost 78% - and in most months there is more unfulfilled demand in the market than would be expected.
• By identifying and applying market demand growth rates the study identified a requirement for an additional 285-355 rooms in the market for 2026. This suggests potentially three hotels of significant size.

Marc Finney, head of Hotels & Resorts Consulting at Colliers added: "Swansea is a good example of a UK city that has seen a number of years of demand growth with very little addition to new supply.

"This creates opportunities for astute investors to benefit from the positive developments in the city, in the knowledge that they will be entering the market with a fresh modern product, with strong market fundamentals to underpin that investment."