Cardiff city centre and Cardiff Bay provide excellent opportunities for new hotels.

Although on the face of it well-supplied for hotels, the real opportunities are in the city centre and bay, very popular visitor destinations that are also subject to significant investment and development, and with a shortage of contemporary hotels.

As highlighted in a previous blog, Cardiff is an exception to the general post-Covid trend amongst regional UK cities where city centre occupancy is often lower than the wider market due to the slower recovery in domestic business travel. That Cardiff is an exception to this rule is partly due to the type of corporate demand driven to the city centre, including media and Government, but also due to its broad attraction and recovery of leisure and events tourism.

City centre and Cardiff Bay occupancy in 2023 was 77.6% against the wider market average of 77.1%.

ADR for the central hotels was £93.39, 7.3% higher than the wider market average and a very healthy 19% higher than 2019. All hotels benefit from a very large weekend rate premium (particularly Saturday) due to the strength of the weekend leisure and events market, with even greater spikes when there are events at the Principality Stadium.

There have been relatively few recent hotel openings in Cardiff city centre and those have tended to be at either the economy or upper upscale ends of the spectrum. There are notable midmarket product and brand gaps and a dearth of contemporary design-led and lifestyle hotels. Many of the upper midmarket hotels are dated and often tired.

There is only a Premier Inn under construction currently, and the only confirmed scheme in the pipeline is the Travelodge at Atlantic Wharf that will replace the one being demolished to make way for the new arena.

Cardiff has a strong and growing economy, with average GDP growth for ten years to 2021 a very healthy 3.4%. This is driven by a broad base of sectors including tourism, Welsh Government, creative sectors, financial and professional services, and a range of sporting, entertainment and cultural events at numerous venues across the city.

But with an eye to the future, the most exciting piece in the Cardiff demand jigsaw is the number of development and regeneration projects planned and underway including the under construction Atlantic Wharf indoor arena (capacity for 15,000), commercial and leisure developments at Central Quay and Central Square and the International Sports Village in Cardiff Bay.

AR Hospitality Consulting has worked on a number of hotel projects in Cardiff city centre in recent years, and it is clear that the future is very bright and that there will be very strong investment and development opportunities for new hotels in the coming years.

Get in touch for further details.

Andrew Renouf – 07584 186520