Two major new hotel projects have received planning permission in recent weeks, as demand for new hotels across the capital appears to continue unabated.
The approvals come despite concern in some quarters that too many hotels are being built. Several boroughs have tightened policies to restrict hotels, or at least corral them into specific areas away from homes and close to public transport nodes.
The grandest of those recently approved is the new Peninsula, which will occupy a commanding site overlooking Hyde Park Corner. A modest eight storey block, designed by Hopkins Architects, will replace the existing 1960s office block and provide Hongkong & Shanghai Hotels with a 190 room luxury hotel, as well as up to 28 apartments.
It will sit directly alongside the Lanesborough, which recently reopened following an 18 month closure for extensive refurbishment.
The block will reach the boundaries of the site, though a central 30m square courtyard has been created, into which vehicles will enter from Grosvenor Crescent, to drop off and collect guests. The application notes that, of 68 car parking spaces on site, 22 will be required for the hotel’s own fleet – famously, at other Peninsula hotels this is made up exclusively of Rolls Royces.
The development’s affordable housing commitment will be met by the provision of 23 homes on a separate site, at 32-42 Buckingham Palace Road.
The project is being jointly backed by the hotel’s operator HSH, and by Grosvenor, which owns most of surrounding Belgravia. And it received the blessing of Westminster planning committee members, who decided the addition outweighed local concerns.
“We are delighted to partner with Grosvenor to bring the Peninsula brand to London,” said HSH managing director Clement Kwok. “As a company with 150 years of history, HSH is genuinely committed to the long term and focuses on developing, as an owner-operator, a small number
of the highest quality Peninsula hotels in key international gateway cities. Each of our hotels
embraces the local culture, style and history to deliver a unique experience for guests. As one
of the world’s most important destinations for business and tourism, London will be an exciting
addition to our global network.” Construction should start in 2017.
And in Shoreditch, the latest addition to the area’s cluster of hotels will be a 200 room hotel, part of a mixed office and hotel scheme that won approval from Hackney planning committee in early December. The Gensler designed scheme for the Shoreditch High Street site includes a 31 storey block complete with a cantilevered sky lounge, a similar design feature to the Manchester Hilton.
The design features a “stacked box” form, while despite local opposition the scheme was recommended for approval as being a project that “reflects the emerging character of contemporary Shoreditch as opposed to the City”. Developer Highgate Holdings has yet to declare whether a branded hotel operator will flag the building, though the company’s extensive experience in the USA often sees it manage single brand hotel properties.
“Our design respects Shoreditch’s rich industrial legacy, while providing local entrepreneurs and creative businesses with office space and shared amenities,” said Gensler regional managing principal Duncan Swinhoe. The hope is to have the hotel open by late 2018.
The addition to Shoreditch will see the new hotel sit alongside a number of upcoming similar developments in the area, including other US imports such as Gansevoort, which has chosen Shoreditch as its UK launchpad. The 120 room Gansevoort is under construction on a site at Curtain Road, with a summer 2016 completion planned. In contrast with the Highgate project, Gansevoort’s hotel, designed by Dexter Moren, will be six storeys high.
The additions meet what is acknowledged as a continuing need for new hotel accommodation in the capital. The London Plan sets out an argument for an additional 40,000 net new hotel bedrooms by 2036.
And a good part of that supply is in the pipeline. The capital is expected to see a 12% growth in hotel room stock over the next three years, according to a recent study published by London & Partners, in association with AM:PM. The growth will be at the top and bottom of the market, with budget and five star segments of the market seeing growth.
By the end of 2018, the survey says a further 43 budget hotels will open, increasing budget accommodation in the capital by 29%. And 19 five star properties have been identified in the pipeline, adding 22% to the room stock in this segment.
The growth is coming into a market that remains strong. Average occupancy is expected to hit 84% this year, a decade high, though the figure has been at 80% or above since 2006.
LPA Perspective: These two projects demonstrate just how much the capital’s hotel market varies in look and feel – to meet the varying requirements of guests. HSH and Grosvenor have played safe with a classic look, for the classic luxury hotel guest, on a blue chip site overlooking Buckingham Palace gardens. Conversely, the Highgate project is edgier in style and location – but joins a throng of stylish hotels in the east.
The budget sector is dominated by Premier Inn and Travelodge, which are due to open several new properties each. Also coming into the market are foreign brands including Motel One from Germany, and the Asian brand Tune. EasyHotel, described as a super budget brand, is also looking to expand its footprint.
Planners are right to be careful about hotel locations, while ensuring the provision meets demand. But in thinking about the latter, they need to keep abreast of disruptive newcomers such as Airbnb, an accommodation sharing site that lets Londoners (and anyone else, for that matter) rent out their spare rooms. Publicly, many hotel groups are saying this revolution in accommodation rental is having no impact on their businesses. Privately, many are watching it carefully. Still in fast growth mode with the early adopters, it has the potential to markedly reduce the need for standard hotel accommodation.