South East Hotel Development: Home

Medway comprising of Rochester, Chatham, Gillingham, Strood and Rainham with a population of 250,000 people, is the largest urban conurbation in the South East outside of London. Medway is part of the Thames Gateway and has received over £97 million of regeneration funding from the Office of the Deputy Prime Minister over the last three years. The waterfront in particular is undergoing several immense regeneration schemes. As a result of this there will be significant growth in population, new leisure and cultural facilities and corporate demand for hotel accommodation.

Hotel Supply

Medway currently has 11 hotels with a total of 610 bedrooms. For an area with a population of 250,000, the current supply of hotel accommodation is low, particularly when compared to neighbouring towns with a much smaller population like Maidstone.
Medway’s current hotel supply is dominated by two 3/4 star and by diamond-rated/ lower grade non-inspected hotels, together with a small supply of branded budget hotels. The Bridgewood Manor and Holiday Inn Rochester-Chatham account for over 40% of Medway’s hotel stock. Medway has a significant stock of diamond-rated and lower grade non-inspected hotels, accounting for 35% of Medway’s total hotel bedrooms.
Medway’s hotel supply is spread fairly evenly between Rochester, Chatham and Gillingham. Bridgewood Manor and the Holiday Inn Rochester-Chatham are both located close to junction 3 of the M2. The two budget hotels are in Gillingham. There is only one small inn at Chatham Maritime.

Current Medway Hotel Supply – by Standard – April 2005
Standard	Estabs	Rooms	% of Rooms
4 star	1	100	16.4
3 star	1	149	24.4
2 star	1	14	2.3
1 star	1	28	4.6
Budget	2	104	17.0
4 diamond	-	-	-
3 diamond	4	170	27.9
Lower grade non-inspected	1	45	7.4
Total Supply	11	610	100.0

Current Medway Hotel Supply – by Size– April 2005
Size of Hotel	Estabs	Rooms	% Rooms
Under 10 rooms	-	-	-
11-20 rooms	3	38	6.2
21-30 rooms	1	28	4.6
31-50 rooms	3	139	22.8
51-100 rooms	3	256	42.0
101 room +	1	149	24.4
Total Supply	11	610	100.0

Current Medway Hotel Supply - by location standard and Size – April 2005
Hotel	Standard	Rooms
Rochester
Holiday Inn Rochester-Chatham	3 star	149
Gordon House	2 star	14
Royal Victoria & Bull	n/a	28
Medway Manor	Awaiting grade	45
King’s Head	3 diamond	13
Chatham
Bridgewood Manor	4 star	100
St George	3 diamond	48
The Ship & Trades	3 diamond	11
Gillingham
King Charles	3 diamond	98
Premier Travel Inn	Budget	46
Travelodge Medway	Budget	58

Medway Hotel Performance

3/4 Star Hotels

Average annual room occupancies for Medway and Maidstone hotels (65.8%, range 55%-74%) and are improving. Average annual achieved room rates £63.74 in 2004 are in line with the national average.

There are significant differences in occupancy and achieved room rate performance between hotels in the area, depending on their business strategies. Two hotels have been driving rate rather than occupancy, while two have gone more for volume, but at the expense of rate. Differences in rooms revpar performance are only slight, however, with no significant difference between the two Medway 3/4 star hotels.

Market Mix – Medway/ Maidstone Branded 3/4 Star Hotels – 2004
Market Segment	Market Mix %
Corporate	40
Residential Conferences	14
Leisure Breaks	24
Group Tours	5
Weddings and Functions	12
Other	5
	100

Budget Hotels

The average annual room occupancies for branded budget hotels in Medway, Maidstone and Gravesend are approximately 80%, which has been fairly constant over the last three years. Average annual achieved room rates were £39.90 in 2004.

Business visitors, travelling sales representatives and contractors working on local projects are the primary source of weekday business for budget hotels in Medway, Maidstone and Gravesend.

2 Star, Diamond rated and lower grade Non inspected Hotels

The average annual room occupancies for this type of hotel ranged from 64% to 75% in 2004 with average achieved room rates in 2005 being £35.

The key weekday markets for most diamond-rated and lower grade hotels in Medway are contractors working on projects in the area and travelling sales representatives. These are also the key weekday markets for lower grade hotels along the A2 in Gravesend. One hotel also attracts midweek group tour business, and two reported attracting some demand during the week from weddings and functions. Demand from local companies is the key source of weekday business for Medway 2 star hotels.

Weekday and Weekend Hotels Occupancies – Medway and Surrounding Area 2004
Year	Average Annual Room Occupancy %
Year	Medway/ Maidstone Branded 3/4 Star Hotels	Medway/ Maidstone/ Gravesend Budget Hotels	Medway 2 Star/ Diamond-Rated/ Lower-grade Non-Inspected Hotels
Mon-Thurs	76	91	68
Fri	53	64	47
Sat	80	79	88
Sun	35	41	39

KENT – MEDWAY: THE POTENTIAL FOR NEW HOTEL DEVELOPMENT

Medway is part of the Thames Gateway and is therefore undergoing a very exciting huge regeneration scheme mainly along the River front. £97 million of funding has been committed by the Office of the Deputy Prime Minister in the last three years. The new £62 million Dickensworld attraction is due to open in spring 2007 as well as considerable waterfront developments including marinas, river walks, and restaurant quarters. The Historic Dockyard, Chatham and its unique defences are nominated for World Heritage site status. As a result a number of the large regeneration schemes which are taking place several potential hotel sites are coming available.

There is potential for substantial future growth in the Medway hotel market that is likely to fuel demand for new hotel accommodation in terms of;
Significant growth in the corporate market given Medway’s role in Thames Gateway and the significant levels of additional employment forecast;
Some potential for growth in the residential conference market on the basis of this envisaged growth in Medway’s economy, and the opportunities presented by an expanded hotel stock. Should a conference/exhibition centre or arena be developed, this growth could be more significant;
Continued growth in the leisure break market as this market expands nationally, the Medway offer improves, and new branded hotels promote leisure break offers;
Growth in the weddings, functions and VFR markets in line with the significant increases in population forecast here, and the relatively young age profile;
Further growth in group tour business
The expansion of the HE sector in Medway, potentially generating increased demand for hotel accommodation from visiting parents, conferences, graduations, visiting academics and vacation courses.
Growth in other markets including the independent overseas visitor market and events-related demand.
Projections of future growth in Medway’s hotel market, suggest potential for an additional 74 to 189 3/4 star hotel rooms and 103 to 239 budget hotel rooms over the next 10 years in Medway.

Specific potential sites include: