Eurovision would help fill glut of Glasgow hotels
Glasgow has been shortlisted to host next year’s Eurovision Song Contest as recent research shows it may need more high profile events to fill a rapid increase in hotel rooms.
With nearly 2,100 rooms under construction, the next two years will see some of the biggest additions to supply since 2018. That year, more than 1,000 rooms opened, one of its highest levels in the past 10 years.
With such a rise in available rooms in a short space of time and in a somewhat constrained market, property analysts at Co-Star say occupancy may not return to pre-pandemic levels once these rooms are absorbed.
A lot of the new development will be concentrated around the River Clyde and within the upper end of the market, intensifying competition within that segment.
Glasgow’s “rise to fame”, following the Commonwealth Games, has led to increased developer and operator interest with most brands wanting to be present in the city, particularly with it being host to global events, such as the COP26 Climate Conference last year, and the Commonwealth Games in 2014. Next year the city will host the World Cycling Championships.
Co-Star’s analysis notes that while these events are excellent for stimulating demand, “how hoteliers manage their revenues in the months or years after them is extremely important. In the absence of such major events, efficient management is required in order to minimise potential losses due to reduced trading.”
In the five years up to 2024 more than 3,000 rooms will be added to the Glasgow hotel market, a 25% increase to supply prior to the pandemic.
“Such significant increases to hotel supply is set to decelerate occupancy growth,” says Co-Star. “As the city absorbs these additional rooms, occupancy is not expected to reach pre-pandemic levels once it stabilises, and there is a risk of oversupply in the short term.
“Local hoteliers will need to be innovative in the way they manage their properties to ensure they are capturing their fair share of the market with a balanced segmentation mix to support demand throughout the year.”
The seven cities up looking to host next year’s Eurovision Song Competition are Birmingham, Glasgow, Leeds, Liverpool, Manchester, Newcastle and Sheffield.
It was moved from Ukraine – which won this year’s contest – because of the instability in the country caused by the war with Russia. The UK, which was runner-up, was chosen as a substitute host.
The cities who bid were judged on a range of components including being able to host at least 10,000 people in a venue as well as having nearby access to an international airport.
The two-stage selection process will next consider factors such as experience of holding large events.
Hotels opening in Glasgow in 2022 and 2023
AC Hotels by Marriott, 262-266 George Street (245 rooms)
It will form part of a mixed-use development expected to transform the north-east corner of George Square into a new neighbourhood called ‘Love Loan’, being developed by the Chris Stewart Group.
Adagio Glasgow Custom House, 286 Clyde St (162 rooms)
Set in the Custom House redevelopment and opening in September.
Clayton Hotel Glasgow City, 286 Clyde Street (300 rooms)
Dalata Group is opening its second property in the city, following the Maldron brand’s entry to Glasgow in August last year. Overlooking the Clyde and close to the financial district it is scheduled for an autumn opening.
Virgin Hotel Glasgow, 236-246 Clyde Street (242 rooms)
Virgin Hotels’ second property in the UK and Europe.