MEDWAY HOTEL MARKET FACT FILE

MEDWAY HOTEL MARKET FACT FILE

INTRODUCTION Medway is currently ging thrugh a huge transfrmatin as part f a 20-year regeneratin prgramme that is set t deliver majr new transprt infrastructure, up t 16,000 new hmes, mre than 20,000 new jbs, and a massive imprvement t the physical envirnment f the area. By 2026 Medway will have been transfrmed int a linear city f 300,000 peple spanning 11 kilmetres alng the River Medway frm Strd and Rchester in the west t Gillingham in the east, with Chatham twn centre and waterfrnt at its heart. Medway is als develping as a leisure turist destinatin, with new attractins pening in Rchester and Histric Dckyard Chatham in 2015 and 2016, plans fr mre events, and a renewed destinatin marketing fcus. The develpment f Lndn Paramunt Resrt n the Swanscmbe Peninsula between Dartfrd and Gravesend is set t create significant pprtunities fr htels in Medway, frm cntractrs during its cnstructin phase, and families wanting t visit the resrt nce it is pen. Demand related t weddings and ther family ccasins and frm peple visiting their friends and relatives in Medway is als set t grw as the ppulatin increases. All f these develpments pint t a significant increase in demand fr htel accmmdatin in Medway ver the next 5-10 years, creating pprtunities fr investment in existing htels and ptential fr new htels t pen as the market grws. The Medway Htel Market Fact File prvides the latest available infrmatin n: The current htel supply in Medway; Recent htel develpment; Current htel develpment prpsals; Recent htel perfrmance; The key markets fr htel accmmdatin in Medway; The prspects fr grwth in demand fr htel accmmdatin and what will drive this. All f the data and infrmatin in the Fact File has been cmpiled frm research undertaken by cnsultants Htel Slutins in August, September and Octber 2015. Medway Htel Market Fact File 1

INTRODUCTION Fr further infrmatin and cntacts r t discuss yur requirements cntact: Ed Wllard Principal Turism Develpment Officer Medway Cuncil Civic Headquarters Gun Wharf Dck Rad Chatham Kent ME4 4TR Tel: 01634 338122 Email: ed.wllard@medway.gv.uk Medway Htel Market Fact File 2

MEDWAY HOTEL SUPPLY Current Htel Supply There are currently 14 htels in Medway with a ttal f 894 letting bedrms. The Medway htel supply is predminantly a mix f 3 star and budget htels, tgether with ne 4 star htel, tw small 2 star htels and tw small nn-inspected htels. Limited service (budget) htels accunt fr just ver half f Medway s htel supply. MEDWAY HOTEL SUPPLY JANUARY 2016 Standard Htels Rms % f Rms 5 star 0 0 0 Butique 0 0 0 4 star 1 100 11.2 3 star 3 257 28.7 2 star 2 59 6.6 Budget 6 451 50.5 Nn-inspected 2 27 3.0 Serviced Apartments 0 0 0 Ttal Htels 14 894 100.0 The Medway htel supply is split between Chatham, Rchester and Gillingham. Chatham accunts fr 44 per cent f Medway s ttal htel supply and is the lcatin f the 4 star Bridgewd Manr, Hliday Inn Rchester-Chatham and Traveldge Chatham Maritime budget htel. Gillingham has the next largest number f htel bedrms. The htel supply here is predminantly budget htels. Gillingham als has ne 3 star htel althugh it trades at lwer rm rates than the budget htels here. Of the three main Medway twns, Rchester has the lwest number f htel bedrms. The nly significant htel here is the Premier Inn Rchester at the Medway Valley Leisure Park in Strd. There are nly three small 2 star and ungraded htels in the centre f Rchester, tw f which appear t ffer a lw standard f accmmdatin, judging by the largely unfavurable custmer reviews they are receiving n Tripadvisr. Medway Htel Market Fact File 3

MEDWAY HOTEL SUPPLY MEDWAY HOTEL SUPPLY JANUARY 2016 Lcatin 4 Star 3 Star 2 Star Budget Ungraded TOTAL Htels Rms Htels Rms Htels Rms Htels Rms Htels Rms Htels Rms Chatham 1 100 2 160 1 45 1 90 5 395 Rchester 1 14 1 121 2 27 4 162 Gillingham 1 97 4 240 5 337 Ttal Medway 1 100 3 257 2 59 6 451 2 27 14 894 Medway Htel Market Fact File 4

MEDWAY HOTEL SUPPLY MEDWAY HOTELS JANUARY 2016 Establishment Grade 1 Rms Chatham Bridgewd Manr 4 star 100 Hliday Inn Rchester-Chatham 3 star 149 Ship & Trades 3 star 11 St Gerge 2 star 45 Traveldge Chatham Maritime Budget 90 Rchester Grdn Huse, Rchester 2 star 14 Premier Inn Rchester, Medway Valley Leisure Park Budget 121 Ryal Victria & Bull n/a 15 The King s Head n/a 12 Gillingham King Charles 3 star 97 Premier Inn Gillingham Business Park Budget 76 Premier Inn Chatham/Gillingham (Victry Pier) Budget 80 Premier Inn Rainham (Kent) Budget 26 Traveldge Medway M2, Rainham Budget 58 Nte: 1. VisitBritain, AA, bking.cm gradings In additin t htels, the Cling Castle Barn wedding venue at Cling has 15 luxury bedrms fr use by wedding parties. Medway Htel Market Fact File 5

MEDWAY HOTEL SUPPLY Changes in Supply 2010-2015 New Htels Three new Premier Inn budget htels have pened in Medway in the last five years. MEDWAY - NEW HOTELS 2005-2010 Htel Lcatin Standard N. Rms Year Opened Premier Inn Rchester Medway Valley Budget 121 2010 (Octber) Leisure Park Premier Inn Rainham (Kent) Rainham Budget 26 2010 (Nvember) Premier Inn Chatham/Gillingham (Victry Pier) Gillingham Waterfrnt Budget 80 2015 (May) Investment in Existing Htels The Ramada Encre upper-tier budget htel at Chatham Maritime was rebranded as the Traveldge Chatham Maritime at the end f 2015. There have been n extensins t any f Medway s existing htels ver the last five years. The public areas f the Bridgewd Manr and Hliday Inn have been refurbished in 2014. The Hliday Inn has als refurbished its swimming pl. There has therwise been n significant investment in any f Medway s existing htels, ther than nging upkeep and redecratin. Medway Htel Market Fact File 6

MEDWAY HOTEL SUPPLY Prpsed Htel Develpment Htels Under Cnstructin The natinal pub and htel chain JD Wetherspn is currently develping 9 htel bedrms as part f its 1.5 millin refurbishment f the Glden Lin pub in Rchester Htel Prpsals A site n Crpratin Street in Rchester twn centre has planning permissin fr a 110-bedrm budget htel at the back f the Visitr Infrmatin Centre. The permissin, riginally granted in 2008, was renewed in 2012. Planning permissin was granted in May 2015 fr the cnversin f the frmer accmmdatin blck fr the Equestrian Centre at Walnut Tree Farm in Rainham int a 56-bedrm htel. The masterplan fr Rchester Riverside identifies ptential fr a htel at the Statin Gateway site and pssibly a secnd htel at Blue Bar Wharf, depending n lnger-term market cnditins. The design brief fr the Chatham Waterfrnt site includes prvisin fr an 80- bedrm htel. The utline permissin fr the Chatham Waters develpment includes prvisin fr a htel. The plans fr the Ldge Hill develpment at Chattenden include tw ptential htels. Medway Htel Market Fact File 7

MEDWAY HOTEL PERFORMANCE & MARKETS Occupancy and Achieved Rm Rates Average annual rm ccupancies and achieved rm rates fr htels in Medway are estimated as fllws fr 2013, 2014 and 2015. Standard f Htel MEDWAY HOTEL PERFORMANCE 2013-2015 Average Annual Rm Occupancy % Average Annual Achieved Rm Rate 7 2013 2014 2015 2013 2014 2015 UK Prvincial Htels (All Standards) 1 72.6 75 76 5 59.94 62.07 64.73 5 UK Prvincial UK 3/4 Star Chain Htels 2 72.0 73.9 n/a 71.46 76.49 n/a Medway 3/4 Star Htels 3 68 71 71 6 51.02 51.82 55.69 6 Medway Budget Htels 4 75 80 83 6 48.00 49.75 53.54 6 Medway Htels (All Standards) 71 75 76 6 49.59 50.85 54.13 6 Surce: Htel Slutins Octber 2015 Ntes 1. Surce: STR Glbal 2. Surce: TRI Htstats UK Chain Htels Market Review 3. Sample: Bridgewd Manr, Hliday Inn Rchester-Chatham, King Charles, St Gerge 4. Sample: Ramada Encre Chatham, Premier Inn Rchester, Premier Inn Gillingham Business Park, Premier Inn Rainham (Kent) 5. PwC UK Htel Frecast 2015 6. Based n frecast figures prvided by htel managers 7. Net f VAT and breakfast Occupancy perfrmance fr Medway s htel sectr as a whle has been bradly in line with UK prvincial averages fr the last three years. There has hwever been a significant difference between full service (3/4 star) htels and limited service (budget and upper-tier budget htels). Average annual rm ccupancies fr Medway s full service (3/4 star) htels have been 3-4 percentage pints belw the natinal averages fr prvincial 3/4 star chain htels. While there was sme imprvement in 2014, as a result f an increase in prject-related crprate demand and film crew business, ccupancies have remained unchanged in 2015. Budget htels, n the ther hand, have achieved very high average annual rm ccupancies and have seen a year-n-year imprvement in ccupancy perfrmance, with further grwth in 2015 despite the pening f the new Premier Inn at Victry Pier. Medway Htel Market Fact File 8

MEDWAY HOTEL PERFORMANCE & MARKETS Achieved rm rate perfrmance fr Medway s htel sectr is significantly behind natinal averages. This is largely t d with the lw average rm rates that are achieved by Medway s 3/4 star htels. They are substantially belw the natinal averages fr prvincial 3/4 star chain htels, and nly just ahead f the levels achieved by Medway s budget htels. There is hwever a significant difference in achieved rm rate perfrmance between htels, with ne htel trading at much lwer average rm rates, particularly since the pening f the new Premier Inns, with which it has struggled t cmpete n price. This has reduced verall perfrmance fr Medway 3/4 star htels, hwever nne f the ther htels have been achieving much higher average rm rates. One htel saw a drp in average rm rates in 2014 as it fcused mre n driving ccupancy. Mst htels have been mre able t yield rm rates in 2015 as demand has strengthened, resulting in sme imprvement in achieved rm rate perfrmance. In cntrast t 3/4 star htels, Medway s budget htels are trading at average rm rates that are fairly typical fr budget htels. Achieved rm rate perfrmance has als strengthened fr Medway budget htels in 2015. Medway Htel Market Fact File 9

MEDWAY HOTEL PERFORMANCE & MARKETS Midweek/Weekend Occupancies Estimated weekday and weekend ccupancies fr Medway htels in 2015 are summarised in the table belw. MEDWAY HOTELS - WEEKDAY/ WEEKEND OCCUPANCIES 2015 Standard Typical Rm Occupancy % Mn-Thurs Fri Sat Sun 3/4 Star Htels 75 66 86 45 Budget Htels 88 77 93 52 Surce: Htel Slutins Octber 2015 Midweek ccupancies vary significantly fr 3/4 star htels. Tw htels reprted midweek ccupancies f just under 80% in 2015, while tw reprted weekday ccupancies f arund 65-70%. Tuesday and Wednesday nights were the strngest, with mst 3/4 star htels smetimes filling and turning business away n these nights t varying degrees. Mnday and Thursday night ccupancies tend t be lwer. Mst 3/4 star htels have a fairly stable pattern f midweek ccupancy thrughut the year. Midweek crprate demand dips in August and September but htels are usually able t replace this with grup tur business t maintain weekday ccupancy levels. One htel that fcuses mre n the grup tur market reprted a mre seasnal trading pattern, with high midweek ccupancies between May and September and much lwer weekday ccupancies between Nvember and March. Medway s budget htels achieve very high midweek ccupancies. They generally fill and turn business away n Mnday, Tuesday and Wednesday nights fr much f the year. Thursday ccupancies are slightly lwer, particularly in the winter, but still average ver 80 per cent. Saturday ccupancies are strng at all levels in the market thrughut the year. Friday ccupancies are nt as strng, ther than fr budget htels, which generally trade at ccupancies in excess f 80% n Friday nights. Sunday ccupancies are much lwer, and again strnger fr budget htels. Friday ccupancies tend t be strnger between April and Octber. Sunday ccupancies are lw all year. Medway Htel Market Fact File 10

MEDWAY HOTEL PERFORMANCE & MARKETS Midweek Markets and Trends Crprate demand frm Medway cmpanies is the main surce f midweek demand fr 3/4 star htels in Medway. One htel attracts a small amunt f residential cnference and training curse business. This is nt a market that ther 3/4 star htels attract hwever. Cntractrs are a significant midweek market fr ne htel, a secndary midweek market fr anther, and a minr market fr a third htel. Grup turs are a significant midweek market fr ne htel between May and September. Anther htel als takes grup turs during the summer mnths t cmpensate fr the dwnturn in crprate business at this time f year. Leisure breaks are a minr weekday market fr tw htels. One htel attracts sme bedrm business frm midweek weddings. TV and film prductins at Chatham Histric Dckyard, in particular Call the Midwife, generate sme midweek business fr ne htel. Budget htels in Medway attract a mix f crprate and cntractr demand during the week. They als attract sme midweek business frm peple visiting friends and relatives, attending funerals r visiting peple in hspital; film crews; university-related demand frm visiting academics and cnference delegates; and grup turs in the summer fr ne htel. While Medway htels attract much f their crprate business frm cmpanies in their immediate vicinity, mst htels als attract business frm cmpanies in ther parts f Medway. Crprate demand is ften prject-related and unpredictable therefre. The Medway crprate market is highly cmpetitive, which keeps crprate rates at a relatively lw level. Grup turs are mainly frm the UK and Eurpe, in particular Germany, the Netherlands, France, Belgium and Italy. Overseas grups either stay fr a single night stp-ver en-rute t/frm the Cntinent, r base themselves at a Medway htel fr a 4 night stay t visit Kent and Lndn. UK grup turs tend t stay 2-3 nights are cme primarily fr the Histric Dckyard and Rchester Cathedral. Htels als attract sme Call the Midwife turs. This is a seasnal market, with grups generally visiting between April and September. It is generally lw-rated business that htels take t bst ff peak perids, particularly during the summer when crprate demand reduces. One htel has fcused mre n this market as it has lst crprate and cntractr business t the new Premier Inns that have pened in Medway. Medway Htel Market Fact File 11

MEDWAY HOTEL PERFORMANCE & MARKETS In terms f trends in midweek demand: Crprate demand has grwn in 2014 and 2015 as the ecnmy has strengthened and as a result f new prject-related business. Cntractr demand has increased. There has been n change in residential cnference demand. Demand frm film prductins at the Histric Dckyard has grwn. One htel reprted an increase in UK grup tur business but a dwnturn in Eurpean grup turs. Anther reprted an increase in grup tur business, while ne htel has taken fewer grup turs during the summer as demand has grwn frm higher-rated markets. Weekend Markets and Trends The key weekend markets fr Medway s 3/4 star htels are weekend leisure breaks and weddings and functins. The relative imprtance f these tw markets varies between htels. Grup turs are an imprtant secndary weekend market fr tw htels. Htels attract sme weekend demand frm the crprate and cntractrs markets. Lcal events are a further generatr f business fr htels. Other weekend markets are stp-vers en-rute t/frm the Cntinent and peple visiting friends and relatives. Key draws fr weekend breaks are Chatham Histric Dckyard, Dicken s Wrld, Rchester Castle and Cathedral, Diggerland, Leeds Castle and the castles, gardens and Natinal Trust prperties in the surrunding parts f Kent. Spa breaks are a key market fr Bridgewd Manr. The family market is strng fr ne htel. Weekend break business is largely rate driven thrugh OTAs (bking.cm, LateRms, Expedia etc.) and special ffer prmtins by the htel chains represented in Medway. Weekend markets fr budget htels are a mix f peple cming fr weekend breaks t visit the Histric Dckyard and ther Medway attractins; peple attending weddings and ther family parties; and peple visiting friends and relatives. Budget htels als attract sme weekend demand frm the crprate and cntractr markets, parents f university students visiting their children, and business related t lcal events. Medway Htel Market Fact File 12

MEDWAY HOTEL PERFORMANCE & MARKETS Events that generate sme demand fr htels in Medway include: Rchester Dickens Festival Rchester Christmas Market Rchester Sweeps Festival Fuse Medway Festival Castle Cncerts, Rchester Castle Events at Chatham Histric Dckyard Natinal and internatinal sprts events at Medway Park e.g. Wheelchair Rugby League Wrld Cup (2013) and Eurpean Champinships (2015) Ramblin Man Fair, Maidstne Internatinal Gathering f Champins, Prayer City, Buckmre Park Vlv Wrld Matchplay Glf, Lndn Glf (2014) In terms f trends in weekend demand: Weekend break demand has remained largely static verall. Sme htels have seen an upturn in weekend break business, thers reprted n change in this market, and ne htel has seen a drp in weekend break business in 2015. Bridgewd Manr has seen strng grwth in spa break business. Tw htels have seen an increase in demand frm weddings. One reprted a dwnturn in this market. One htel reprted an increase in weekend grup tur business. Anther has seen a reductin in Eurpean grup turs. Medway Htel Market Fact File 13

MEDWAY HOTEL PERFORMANCE & MARKETS Denied Business 1 3/4 star htels in Medway ccasinally turn sme business away n Tuesday and Wednesday nights during peak crprate mnths (March, April, May, Octber, Nvember). Denials at these times are nt particularly high hwever. One htel als turns away midweek business in the summer mnths when it is full with grup turs. Anther htel refuses midweek grup tur bkings. Tw 3/4 star htels regularly turn business away n Saturday nights. Anther ccasinally denies Saturday night bkings. Medway s budget htels regularly deny business n all fur midweek nights. Tuesday and Wednesday night denials are cnsistently high fr mst budget htels. Mnday and Thursday denials are nt quite as strng and are nt as cnsistent during the winter. Medway s budget htels als regularly turn business away n Friday and Saturday nights fr mst f the year, ther than in January. Saturday night denials are generally quite significant. Friday night turndwns are nt as high and are less cnsistent during the winter mnths. 1 Business that htels turn away because they are fully bked Medway Htel Market Fact File 14

MEDWAY HOTEL PERFORMANCE & MARKETS Prspects fr 2016 Medway 3/4 star htel managers are a little uncertain abut the prspects fr their htels in 2016. One expects t see a slight imprvement in ccupancy and achieved rm rate. One sees little prspect f ccupancy grwth but sme scpe t grw rm rate. Anther feels that it is difficult t predict what will happen in 2016 as s much is dependent n crprate prjects, which have yet t be annunced. The new Premier Inn at Victry Pier has had sme impact n tw 3/4 star htels, ne f which expects this htel t cntinue t affect it in 2016. Medway s budget htels are likely t maintain their high ccupancies in 2016 and see sme further grwth in achieved rm rate. The new Premier Inn at Victry Pier is already trading strngly and des nt appear t have greatly affected Medway s established budget htels. Medway Htel Market Fact File 15

PROSPECTS FOR GROWTH Strategic Cntext Medway is part f the Thames Gateway Grwth Area, the largest regeneratin prject in Eurpe, and ne f 4 Grwth Areas identified by Gvernment t deliver significant levels f new husing and jbs in and arund the Suth East. As part f a 20-year regeneratin prgramme Medway is currently ging thrugh a huge transfrmatin that is set t deliver majr new transprt infrastructure, up t 16,000 new hmes, mre than 20,000 new jbs, and a massive imprvement t the physical envirnment f the area. By 2026 Medway will have been transfrmed int a linear city f 300,000 peple spanning 11 kilmetres alng the River Medway frm Strd and Rchester in the west t Gillingham in the east, with Chatham twn centre and waterfrnt at its heart. Key prjects that will help deliver the Medway visin and assciated targets include: Rchester Riverside The latest masterplan fr the regeneratin f this 32-hectare brwnfield site adjacent t the River Medway, published in September 2014, envisages the creatin f a new neighburhd with up t 1,400 new hmes; a new railway statin; a range f public parks and pen spaces; lcal amenities including a primary schl, lcal shps and cmmunity facilities; and new cmmercial uses including ffice space, restaurants and bars, retail, and ptentially tw htels. Blue Bar Wharf, the area next t the histric crane, is earmarked as a new waterfrnt destinatin fr fd, drink and retail. The preferred lcatin fr a htel is the Statin Gateway. Depending n lnger-term market cnditins, the masterplan als suggests that a secnd htel culd be cnsidered at Blue Bar Wharf. Initial phases f affrdable husing were cmpleted at Stanley Wharf in 2012 and 2013 and the new railway statin pens in December 2015. Medway Cuncil has shrtlisted three ptential develpment partners fr the site. It hpes t be in a psitin t sign a develpment agreement with its preferred partner by summer 2016, with a view t wrk cmmencing n site in early 2018, with initial phases cmpleted by 2020. Medway Htel Market Fact File 16

PROSPECTS FOR GROWTH Chatham Waterfrnt This is ne f the mst imprtant regeneratin sites in Medway. It ccupies a prime psitin n the River Medway n the edge f Chatham twn centre and next t Chatham s new state-f-the-art bus statin. Medway Cuncil s ambitin is fr an exemplar develpment cmbining mdern urban living with a range f cmmercial uses t emphasise the river as a destinatin and t cmplement the twn centre ffer. The design brief fr the site, issued in Nvember 2014, envisages a mixed-use scheme which culd include 90 residential apartments, 2,500m 2 f cmmercial space, including a small fd stre; an 80-bedrm htel; and 120 undercrft and surface car parking spaces. The Cuncil is currently in the final stages f acquiring the site and plans t g ut t market in spring 2016 t find a develpment partner r dispse f the site. It is envisaged that wrk culd ptentially cmmence n site in early 2018, with cmpletin pssibly by the end f 2020. Chatham Waters Peel Land & Prperty is currently n site transfrming a 10.5 hectare brwnfield site at the frmer Chatham Naval Dckyard int the Chatham Waters mixed-use scheme. Their plans fr the site include the develpment f 950 new twn huses and residential apartments; a Leisure Bulevard f waterfrnt bars, restaurants and retail utlets; an EventCity exhibitin and event space; a Cmmercial Hub with 400,000 sq ft f ffice space and pprtunities fr specialist educatinal facilities; an ASDA supermarket; green spaces; and a multi-strey car park. The utline planning permissin fr the site als make prvisin fr a htel. The supermarket and new Medway University Technical Cllege pened in 2015 as the first phase f develpment n the site. Medway Htel Market Fact File 17

PROSPECTS FOR GROWTH Chatham Maritime Interface Land A Supplementary Planning Dcument was prepared in Octber 2010 fr this remaining parcel f land at Chatham Maritime. It identifies a range f ptential uses fr the site, including residential, student accmmdatin, high quality ffice space, studi and wrkshp space and cmmercial leisure uses. N firm plans are currently in place t prgress the develpment f this site hwever. Chatham Centre A number f masterplans and develpment briefs have been prduced fr the regeneratin f Chatham Centre, which culd result in the creatin f ver 3,600 new hmes; 2,700 new jbs in 50,000m 2 f emplyment flrspace; the redevelpment f the Pentagn Centre; and new retail and leisure pprtunities. There are n firm plans currently t implement these plans hwever. Victry Pier, Gillingham Waterfrnt Berkeley Hmes is currently prgressing the Victry Pier scheme at Gillingham Waterfrnt t deliver 775 new hmes and ver 2,200m 2 f cmmercial space including bars, restaurants, shps and the new Premier Inn that pened in May 2015. Strd Waterfrnt and Twn Centre This extensive waterfrnt area extends frm the M2, thrugh Temple Waterfrnt and Strd twn centre, t Strd Riverside and adjining Strd statin. It includes a number f distinct mixed-use develpment pprtunities that will be cmplemented by infrastructure and public realm imprvements in the twn centre and t the statin. In ttal these pprtunities are expected t result in ver 2,000 new hmes, 42,300 m 2 f emplyment flrspace and 22,500m 2 f retail. Medway Htel Market Fact File 18

PROSPECTS FOR GROWTH Rchester Airprt Full planning permissin was granted in February 2015 fr the develpment f Rchester Airprt. The plans include a new rerientated paved runway; a science and technlgy business park creating up t 1,000 new jbs; a new aviatin heritage attractin; a pssible extensin t the Innvatin Centre; and pssibly ffices, restaurant, café r gym. Creative Industries Innvatin Hub Medway Cuncil has ambitins t attract creative businesses t Chatham/Rchester thrugh the develpment f a Creative Industries Innvatin Hub, ne f eight prpsed acrss the Suth East LEP area. The University f Creative Arts is als planning t develp a creative business campus at its Frt Pitt site in Rchester. Medway Destinatin Management Plan A new Destinatin Management Plan fr Medway was launched in June 2014. It recgnises that day visitrs will cntinue t be the key market fr Medway but fcuses primarily n attracting mre peple t stay fr shrt breaks, targeting culture-seeking emptynesters, families keen n learning and discvery with their children, and pre-family cuples and singles living in Lndn that are lking fr different places t visit. The Plan sets ut tw pririties firstly t develp the turism cre f the Histric Dckyard Chatham and Rchester, fcusing n cnnecting these tw visitr draws t create a strnger critical mass f visitr experiences that will encurage visitrs t stay lnger and secndly imprved destinatin marketing with themed itineraries and packages, PR activity, digital marketing and brand develpment. Medway Htel Market Fact File 19

PROSPECTS FOR GROWTH The Actin Plan fr Pririty One fcuses n imprving visitr welcme, rientatin and mvement; capitalising n pipeline visitr attractin prjects pening in 2015 and 2016; develping events and festivals; and capitalising n the new events space prpsed at Chatham Waters and the new Lndn Paramunt Resrt planned fr the Swanscmbe Peninsula between Dartfrd and Gravesend. New attractins in Medway include: - The 9millin Cmmand f the Oceans interactive galleries at the Histric Dckyard, pening in 2016. - The Huguent Heritage Centre that pened in Rchester in summer 2015. - The 2millin restratin and re-pening f Eastgate Huse in Rchester, which has cnnectins t Charles Dickens, due t be cmpleted in 2016. - The Rchester Cathedral HLF Hidden Treasures, Fresh Expressins prject due t be cmpleted by the end f 2015, which will include a permanent exhibitin space in the crypt fr the Textus Rffensis and the Cathedral s ther treasures and manuscripts. - A new pen tp bus tur intrduced in 2012. - New hrse and carriage rides intrduced in Rchester in summer 2015. - New jetbat turs. - The ptential intrductin f a new pleasure cruise service in 2016. Key anniversaries fr events are the Siege f Rchester Castle and Magna Carta in 2015, the 350 th Anniversary f the Dutch Raid in 2017, and the 150 th anniversary f the death f Charles Dickens in 2020. Destinatin marketing activity is fcused n wrking with Turism Suth East and Prtsmuth t develp the Dickens Cuntry brand and themed itineraries t target the US grup tur market, alngside attendance at Vakantiebeurs travel trade shw t target the Dutch market. Plans t reach target UK shrt break custmers are als being wrked up. Medway Htel Market Fact File 20

PROSPECTS FOR GROWTH Filming in Medway Varius lcatins in Medway, including the Histric Dckyard Chatham, Rchester, Frt Amherst and Cbham Hall, are increasingly being used fr film and TV prductins, including feature films such as Victr Frankenstein (2015), Suffragette (2015), The Man frm U.N.C.L.E. (2015), Mr Hlmes (2015), Mr Turner (2014) and Les Miserables (2013), and TV dramas Call the Midwife (2012-2015), Mr Selfridge (2013-2015), Jekyll and Hyde (2015) and Partners in Crime (2015). The Call the Midwife TV series attracts visitrs and tur grups t the Histric Dckyard fr lcatin turs. Medway Park Plans are being develped t attract at least ne internatinal, tw natinal and three reginal sprts events per year t the 11.1 millin Medway Park centre f sprting excellence that pened at Gillingham in April 2010. The centre hsted the Eurpean Wheelchair Rugby League Champinships in September 2015 and the Men s Under 21s Handball Wrld Champinship qualifiers in January 2015, and will hst the Eurpean Veterans Fencing Team Champinships in May 2016. Medway Superhub The Medway Superhub is a cluster f sites in Medway and Swale that are suitably sized and psitined t accmmdate the integrated manufacture f blades, gearbxes, nacelles, twers and fundatins fr ffshre wind turbines. Tgether with peratins and maintenance facilities at the Prt f Ramsgate, these sites cmprise the Kent CORE (Centre fr Offshre Renewable Engineering). The site in Medway are Lndn Thamesprt, the Isle f Grain and the Lndn Medway Cmmercial Park. Ldge Hill, Chattenden A new cmmunity is prpsed at Ldge Hill n frmer military land n the H Peninsula, nrth f the River Medway. Plans put frward by Land Securities and the Defence Infrastructure Organisatin prpse Medway Htel Market Fact File 21

PROSPECTS FOR GROWTH 5,000 new hmes; a similar number f new jbs in 44,100m 2 f mixed emplyment flrspace; schls, healthcare and cmmunity facilities; retail prvisin; and tw htels. The site was included as a strategic allcatin f land in the Submissin Draft Medway Cre Strategy that went t examinatin in June 2012. Part f the site was cnfirmed by Natural England as an SSSI in Nvember 2013, leading t the withdrawal f the Cre Strategy. The future f the site remains under cnsideratin by Medway Cuncil in the cntext f preparing a new Lcal Plan fr Medway. There are als three majr prjects in surrunding areas that culd generate demand fr htel accmmdatin in Medway, bth during their cnstructin phase and nce cmpleted: Paramunt Lndn Resrt Plans are being prgressed fr a 2bn, wrld-class, 111-acre entertainment resrt n the Swanscmbe Peninsula between Dartfrd and Gravesend. The resrt will include 50 rides and attractins themed arund the film and televisin prgrammes f Paramunt Pictures and British film and TV cmpanies including BBC Wrldwide, Aardman and the British Film Institute. 70% f attractins will be indrs. Other elements f the scheme include Eurpe's largest water park, a cnference centre, high tech events space, a creative hub designed t attract creative businesses t the site, and up t 5,000 quality htel bedrms. The resrt is expected t attract 15 millin visitrs per year, arund 50,000 n a typical day. Apprximately 25% f visitrs are expected t stay at the resrt. Others will stay in Kent, Essex and Lndn. The resrt will create up t 27,000 jbs. Detailed design, planning and cntractr appintment is scheduled fr Summer 2016 t Autumn 2017, with cnstructin cmmencing Winter 2017 leading t a prjected pening in Spring/Summer 2021. The scale f the accmmdatin demand that the prject will generate means that it culd impact widely n surrunding lcatins in Kent, including Medway, bth during the cnstructin phase and nce pen. Medway Htel Market Fact File 22

PROSPECTS FOR GROWTH Ebbsfleet Valley The develpment f a new garden city, t be knwn as Ebbsfleet Valley, with 17m sq ft f flrspace allcated t a mix f residential, business, retail, leisure and cmmunity uses. The 1035-acre site will see the develpment f up t 10,000 hmes and 20,000 jbs. Cnsultatin is underway n the creatin f an Urban Develpment Crpratin that shuld make delivery easier, quicker and cheaper. The prject is likely t generate significant demand fr htel accmmdatin during its cnstructin. Cmpanies lcating here will als generate new crprate demand fr htel accmmdatin. Medway htels may attract a prprtin f this demand, especially during the cnstructin phase. Lndn Glf Club Permissin has been granted fr a 130 bedrm 5 star resrt htel at Lndn Glf Club. This is a champinship curse which has had cnsiderable interest fr the staging f majr internatinal turnaments, including the Eurpean Tur, which it shuld be able t secure with an n-site luxury htel. Such champinships are likely t generate significant demand fr htel accmmdatin, ptentially spilling ut t Medway. Medway Htel Market Fact File 23

PROSPECTS FOR GROWTH Future Prspects by Market Cntractr demand fr budget htel accmmdatin is set t increase significantly in Medway ver the next 5-10 years given the levels f cnstructin wrk that will be taking place as the majr regeneratin schemes are prgressed in Medway and the cnstructin f the Paramunt Lndn Resrt and Ebbsfleet Valley are prgressed. Cnstructin prjects culd als prduce demand fr full service 3/4 star htels. There shuld be strng grwth in crprate demand fr htel accmmdatin in Medway as the planned ffice and emplyment flrspace is ccupied and new cmpanies are attracted. Grwth in crprate demand is likely t be strngest pst 2020, given the timescales fr mst f the regeneratin schemes. The planned ffices at Chatham Waters and the develpment f the ffshre renewable engineering sectr in the Medway Superhub culd hwever generate new crprate demand mre quickly. The develpment f creative industries in Medway culd create a demand fr a high quality, butique htel ffer. Medway s 3/4 star htels culd see sme grwth in demand fr residential cnferences as the area develps and new cmpanies and industries are attracted. Natinally there has been sme recvery and renewed grwth in the residential cnference market, which Medway htels culd benefit frm. The further strengthening f Medway s attractins ffer, with the pening f the new attractins in 2015 and 2016 and the clser integratin f Rchester and the Histric Dckyard, tgether with the develpment f new events and festivals and imprved destinatin marketing t reach target UK shrt break markets, shuld result in increased demand fr weekend and midweek breaks in Medway. The planned EventCity exhibitin and event space at Chatham Waters culd generate new demand fr htel accmmdatin in Medway, depending n the events that it attracts. Medway Htel Market Fact File 24

PROSPECTS FOR GROWTH The strategy t attract internatinal, natinal and reginal sprting events t Medway Park shuld generate increased demand fr htel accmmdatin fr such events. In the lnger term (pst 2021) the Paramunt Lndn Resrt shuld generate a substantial increase in demand fr htel accmmdatin in Medway, particularly given its direct rail links t Swanscmbe. While the resrt will have 5,000 n-site htel bedrms, the scale f accmmdatin demand that it will generate will present significant pprtunities fr htels in Medway t attract families that want t visit the resrt. Medway htels shuld cntinue t attract grup tur business n the back f the Histric Dckyard, Call the Midwife, and Rchester visitr ffer and Medway s accessibility t ther parts f Kent and Lndn. While this may be lwer-rated business, htels can use this market t bst ff-peak perids and t give them base business t assist them in yielding rm rates. Htels may lk t reduce the number f grup turs that they take as ther higher-rated markets grw. Demand frm peple attending weddings, funerals, family parties and ther functins and frm peple visiting friends and relatives shuld increase steadily, given the prjected grwth in Medway s ppulatin. Medway Htel Market Fact File 25

HOTEL DEVELOPMENT OPPORTUNITIES Budget/Upper-Tier Budget Htels The strength f budget htel perfrmance and levels f business that Medway s budget htels are turning away, cupled with the prspect f significant grwth in cntractr demand and the lnger-term ptential t attract families that want t visit Lndn Paramunt Resrt, all pint t a ptential fr further budget and/r upper-tier budget htels t pen in Medway. Rchester Statin Gateway and/r the Crpratin Street site are prbably the strngest lcatins fr new budget/upper-tier budget htels, given the planned develpment f Rchester Riverside and the direct rail access t Lndn Paramunt Resrt and Ebbsfleet Valley that htels here wuld have. Chatham Waters might als be able t supprt a budget/ upper-tier budget htel, given the ffice develpment that is planned here and the ptential demand that might be generated by the EventCity exhibitins and event venue. Chatham Waterfrnt might als attract interest frm budget/upper-tier budget htel peratrs and the Ldge Hill develpment (if it ges ahead) might als supprt a budget htel. 3/4 Star Htels In the lnger-term (pst 2020) grwth in crprate demand is likely t supprt investment in the upgrading and pssible expansin f existing 3/4 star htels. It remains t be seen whether grwth in the crprate market will be sufficient t supprt a new htel at this level in the market. Serviced Apartments/ A Small Aparthtel Grwth in crprate demand might als be able t supprt the develpment f serviced apartments in Medway, mst likely in terms f the letting f residential apartments t lng stay crprate guests, but ptentially als in terms f the develpment f a small aparthtel r purpse-built serviced apartment cmplex. Medway Htel Market Fact File 26

HOTEL DEVELOPMENT OPPORTUNITIES A Small Butique Htel There culd als be scpe fr a small butique htel in Rchester r pssibly at Chatham Histric Dckyard r Chatham Maritime, given a suitable prperty fr cnversin. Such a htel wuld cater fr the tp end f the crprate market and weekend break demand frm Lndn due t its quality and reputatin fr fd. This culd present an pprtunity fr the repsitining f ne f the small htels in Rchester r the cnversin f a suitable building at the Histric Dckyard r Chatham Maritime. Medway Htel Market Fact File 27

SOURCES OF FURTHER INFORMATION Fr further infrmatin and cntacts r t discuss yur requirements cntact: Ed Wllard Principal Turism Develpment Officer Medway Cuncil Civic Headquarters Gun Wharf Dck Rad Chatham Kent ME4 4TR Tel: 01634 338122 Email: ed.wllard@medway.gv.uk Medway Htel Market Fact File 28