Europe -  Manchester

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Forming part of the UK’s ‘core cities group’ and often described as the ‘capital of the north’, Manchester is a centre for commerce, the arts, media and higher education. It is also regarded as the third-best place in the UK in which to locate a business, while overseas visitors make it the country’s third most visited city. It is claimed that Manchester was the world’s first industrialised city, notable for the central role it played in the Industrial Revolution. Manchester was the dominant international centre of textile manufacture and cotton spinning, and during the 19th century was nicknamed ‘Cottonopolis’. However, much of this trade is now based in the Far East. The city has enjoyed great success in attracting investment over the past several years and has become one of the UK’s fastest-growing cities. Furthermore, the city is an important conference, leisure, sports and retail destination.

Manchester’s visitation numbers regularly swell, with a huge influx of visitors who come to watch the city’s two Premier League football teams (Manchester United and Manchester City) or to attend major events such as political-party conferences. Additionally, the city attracts leisure visitors keen to sample its thriving music, retail and cultural scenes. Following government guidelines with regards to the COVID-19 pandemic, all events at Manchester’s AO Arena were either cancelled or postponed from March 2020 onwards, resuming from September 2021 (and then impacted again by the COVID-19 Omicron variant at the end of the year). As per the latest available statistics (2019), Manchester hosted more than 10.4 million overnight stays and hosted 35 ICCA-ranked events.

The Manchester hotel supply experienced a compound annual growth rate (CAGR) of 3.1% between 2012 and 2021 and is now the largest market outside London (by room count). There are currently 35 properties in the pipeline for Manchester, creating an influx of almost 3,400 new rooms and therefore increased pressure on the future performance of the existing supply, especially for the upper-midscale and upscale supply. The economic impact of tourism activity in the city is significant. Manchester is the UK’s second most visited city for staying visits for both domestic and international markets (behind London). Manchester also has a number of large-scale infrastructure projects, scheduled or currently under development, that should positively affect hotel demand in the city, such as the High Speed 2 rail line or the Co-Op Live Arena.

Within the last decade, the city’s hotel performance has been on the rise and occupancy was stable pre-pandemic at around 80% and rates increased slightly in euro terms at a CAGR of 1.0% for 2009-19. Manchester’s RevPAR shows a steep decline in 2020 of around 70% owing to the negative impact of the COVID-19 pandemic. However, the market started to recover strongly from June 2021 both in terms of occupancy and average rates, benefitting from relatively robust leisure and corporate domestic demand.

2019 proved to be a record year for Manchester as it was ranked as the regional UK market with the greatest transactional volume, with total hotel investments exceeding £500 million, and with an 18% share of total UK regional investment. In 2021, eight hotel transactions were recorded in Manchester, including the 112-room Premier Inn Tomorrow, which was part of the digital tech hub Media City, and the 338-room MacDonald Manchester Hotel, which transacted for approximatively £77 million or £228,000 per key. Hotel values in Manchester increased by 7.2% in euro terms and 3.6% in local currency in 2021 over 2020, thanks to the city’s strong economic and tourism fundamentals that should continue to drive the market’s recovery.

Change In Value For Market: (€Euro)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%

For more information, please contact:

Sophie Perret, MRICS, MBA
Senior Director
[email protected]
  • +44 20 7878 7722 (w)
  • +44 0 7725781037 (m)
Nikola Miljković
Associate
[email protected]
  • +44 0 2078787724 (w)
  • +44 0 7593572865 (m)