2024 was always going to be an interesting year for Liverpool’s hotels following on from a year of high profile major events in 2023 (Eurovision and The Open), and with a number of new openings since the end of 2022.
The great news is that 2024 performance has held up well, with similar occupancy to the previous year, despite a number of new hotel openings, and ADR only slightly lower, and we have had a look at what is underpinning these positive trends.
Historically Liverpool has suffered to an extent from a demand imbalance; extremely strong leisure demand driving peak performance and very high room rates at weekends and during holiday periods, but a dearth of corporate demand (or at least not enough to go around) resulting in lower occupancy and reduced rates midweek for much of the year.
The question is whether this balance has been redressed in recent years and if so how?
Tourism
In 2023 the value of tourism in Liverpool City Region increased by 21% to £6.25bn, with the number of staying visitors increasing by 3.1% to 6.016m (reportedly the highest since 2017) and spend increasing by 17% to £2.4bn.
2024 data will not be available until later this year, but with both Manchester and Liverpool airports exceeding 2019 passenger numbers, it is fair to assume that tourism to the North West has remained very strong, driving hotel performance.
Hotel Performance
According to CoStar, Liverpool RevPAR for 2024 was £69.94, below the previous 12 months, with occupancy broadly the same at 75.9% and ADR 2.8% down at £92.12. ADR is about 23% above 2019, due in no small part to the increase in higher end lifestyle hotels as highlighted in a previous article (luxury and upper upscale rooms have increased from 16.1% of total supply in 2019 to 19.5% in 2024). However occupancy remains well below the 2018 peak of 81.5%, suggesting that corporate demand remains subdued, as is the case across many UK cities.
In 2024, ADR was lower than 2023 in May and July, demonstrating the positive impact of Eurovision and The Open respectively, and has fluctuated in other months as the pattern of events has changed. The fact that occupancy has remained the same however is very positive in the face of significant increases in supply.
All supply in Liverpool has increased by about 12% since 2019 and openings since the end of 2022 include the 201 rooms upper upscale Radisson Red in December 2022, 179 rooms upper upscale Municipal Hotel – MGallery Collection in 2023 and three hotels in 2024; 133 rooms luxury Halyard Liverpool, Vignette Collection, 125 rooms upper midscale Holiday Inn Express Duke Street and 268 rooms upscale Maldron Hotel.
Performance Drivers
Leisure demand, particularly from overseas visitors remained very strong in 2024. Corporate demand, as noted above remains subdued.
What sets Liverpool apart from other cities is the strength of the events market. Sporting and entertainment events have always been strong drivers of demand with two Premier League football clubs (Liverpool FC are enjoying a successful period domestically and in Europe), a large indoor arena and major annual events such as the Grand National. Eurovision was a one-off, but great for the international profile of the city.
In 2024 regular events were supplemented by Taylor Swift and Pink concerts at Anfield.
Liverpool’s profile as a corporate and association conference host also continues to grow, adding demand during some of the leisure trough demand periods.
Accommodation BID is a collaboration between the city’s private sector, the ACC Liverpool and other stakeholders aimed at attracting more major business events to the city. This initiative is partly funded by the city’s hotels, and includes an allocation of funds for “subvention” to enable the city to offer a great value rounded destination product. This model has helped to deliver the Labour Party Conference for the last three years, with a record 20,000 delegates in 2024 and a reported economic impact of £29m in 2023.
The Accommodation BID is cited by other cities’ convention bureaus as a highly competitive way to attract large corporate and association events.
Conclusions and Outlook
Demand in Liverpool has continued to grow in 2024, at the same rate as supply increases. The growth appears to have come predominantly from the event sector, with no material recovery or improvement in traditional corporate demand.
Very positively, there are no pipeline projects that will materially increase supply further in the short-term, so any further demand growth will positively impact both occupancy and ADR.
Whilst corporate demand is likely to remain subdued, the outlook for 2025 for the events sector looks very positive with a number of major events confirmed including the Labour Party Conference, the first World Boxing Championships and another summer season of concerts at Anfield featuring Bruce Springsteen, Billy Joel and Dua Lipa.
In addition, the new 53,000 capacity Bramley Moore Dock stadium for Everton FC will drive additional demand to the city centre.
Other Liverpool Waters regeneration projects continue to make progress, adding to the city’s waterfront appeal and creating future leisure demand growth.
It seems likely that Liverpool’s hotels will continue to enjoy strong demand and revenue performance in 2025, and with the leisure and events offer firmly established, the future looks very bright.
Get in touch for further details.
Andrew Renouf – 07584 186520
andrew@arhospitalityconsulting.co.uk
Photo by Neil Martin on Unsplash