Glenigan's 2025-26 construction industry forecast revealed a positive outlook for the hotel industry in 2025 as a surge in tourism and rising disposable incomes drives growth in hotel and leisure project starts.

A recent report from easyJet showed that 35% of holidaymakers are planning to spend more on a holiday in 2025.

Meanwhile, the value of underlying starts on hotel and guest projects alone is forecast to increase from £1bn last year to just over £1.5bn by 2026.

The forecast highlighted a recent surge in underlying hotel and leisure planning approvals in the capital, rising from just over £1bn in 2023 to over £1.6bn last year, which are translating into more construction work.

The outlook for hotel development in the wider South East region also looks positive.

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The Glenigan forecast noted that the value of underlying hotel and leisure planning approvals in the region was on course to rise to almost £800m last year, up from a little over £600m in 2023.

Scotland is also seeing more hotel-related construction with work is set to start in Glasgow this spring on a £2m refurbishment at the Radisson Blu Hotel.

Elsewhere, the pattern of planning approvals featured in the forecast also points to more hotel building activity in the pipeline in the East of England and the West Midlands.

Meanwhile according to Glenigan, budget hotel chains are also investing heavily in new construction with Travelodge expecting to open five new hotels in 2025 and Premier Inn planning to convert around 112 of its venues into accommodation with a target to build an extra 3,500 hotel rooms.