Newcastle Railway Hotel’s profits on track despite declining market

David Myers chief executive of Sleeperz Hotels at the Newcastle property on Westgate Road

Sleeperz Chief Executive David Myers outside Sleeperz Hotel Newcastle

Sleeperz Hotel Newcastle reports excellent year-on-year growth in over-supplied hospitality market.

Sleeperz Hotel Newcastle, a 98-bedroom premium budget lifestyle hotel on Westgate Road, has reported excellent year-on-year growth on the eve of the second anniversary of its opening.
The hotel’s achievements are good news for Newcastle’s hospitality market which commercial property experts say is showing signs of long term decline and established operators argue is in danger of being overwhelmed by over-supply and new entrants.
The hotel opened in January 2012, as a modern reinvention of a classic British railway hotel, less than two minutes’ walk from Newcastle Central Station.
It is built on the site of a former derelict Parcel Works across two original railway arches bordering the northbound East Coast mainline.

Sleeperz Newcastle’s Strong Second Year
(year-on-year comparison to 2012):

  • 13% increase in occupancy
  • 12% increase in revenue
  • 13% growth in profits
  • 12.5% increase in REV PAR (revenue per available room)
  • An occupancy rate of 75% – 5% above the national average

David Myers, chief executive of Sleeperz Hotels, said: “There’s no doubting that hospitality is a tough market in Newcastle Gateshead and whilst the city continues to attract established hotel brands and new operators, the overall Newcastle hotel market performance is in long-term decline. Sleeperz Hotel Newcastle has been very successful and that’s mainly due to our unrivalled location but also our distinctive brand identity. Sleeperz is different to many of its competitors, we offer stylish contemporary city living in a prime location at budget prices. We also deliver great customer service and are Newcastle’s highest ranking city centre budget hotel on TripAdvisor and Booking.com, making us attractive to both leisure and business travellers.”

In its first year trading, the hotel won a hat-trick of industry awards, including a RIBA (Royal Institute of British Architects) award for Architectural Excellence and welcomed over 35,000 guests.
It has followed its landmark first year with an even stronger second 12 months welcoming almost 40,000 guests.

This month, Sleeperz Newcastle received a Top Overall Ratings Award from users of Venere.com – the leader in online hotel reservations and part of the Expedia.com group – placing it among the top 5,000 properties from Venere’s portfolio of 135,000 worldwide accommodations.

Sleeperz’ success is in stark contrast to a growing number of established operators who have found trading difficult and say there are simply too many hotels and too many beds in Newcastle and Gateshead.
In the past three years, Newcastle has seen several new hotels open in the city, including the Sandman Signature, Hotel Indigo, a second Jury’s Inn and Sleeperz Newcastle.
There are more several more hotels pipelined to open which many existing operators feel will only add to the intense competition and force hotels into discounting and devaluing average rates in the Newcastle market.

Future Hotel openings on Tyneside

  • A 251 bed Crowne Plaza is to open in the regenerated Stephenson Quarter
  • A 100 bedroom Tune Hotel is planned close to Newcastle’s Quayside
  • Motel One plans to open a 222 room luxury budget hotel in High Bridge Street
  • Premier Inn plans a 260-bed hotel in the former Co-op building on Newgate Street
  • Grey Street Hotel has new owners, the Malhotra Group, planning a multi-million pound refurbishment

Worse still REV PAR (revenue per available room) – a trusted indicator of market performance – has been falling.
It dropped 11% in 2012 from its peak in 2007, according to regional property consultants GVA, and yet hotel companies continue to invest in new openings, squeezing established operators and sparking a discounted price war among competing brands.
To find out more, visit: www.sleeperz.com

Notes to Editors

Sleeperz Hotels is a new and innovative UK budget hotels business.

It opened its first UK hotel in the Welsh capital Cardiff in 2008 and is working to a plan to expand and build further hotels in major UK cities, including Liverpool, Manchester and London.

Sleeperz prides itself on introducing a new generation of compact lifestyle hotels into the UK budget hotels market and creating a design led philosophy of colourful, stylish, compact contemporary rooms at affordable room rates.

Its aim is for its customers to experience stylish urban living in a city centre hotel environment.

Sleeperz also aims to build distinctive buildings that make a positive architectural contribution to the cities in which it chooses to build hotels.

The growth in Sleeperz – and the construction of its second UK hotel in Newcastle – has been driven by a £7m investment in the business by the company's investors, including Andre Hoffmann, and Connection Capital. The debt finance for the Newcastle development is being provided by The Co-operative bank.

Videos detailing the hotel experience are available to watch on YouTube at the following link: www.youtube.com/sleeperzhotels