LIVERPOOL’S hotel sector is likely to continue to perform well for the rest of 2008, despite the economic downturn, a new report says.

The research by property con- sultants Knight Frank also says the market for investment in new and existing hotels in the North West is also relatively healthy.

In its UK Hotel Review for summer, 2008, the firm reports that throughout much of the UK hotel sector RevPAR (revenue per available room) continues to show growth. However, it adds that occupancy rates are expected to come under increased pressure, as slight downward shifts are being recorded.

A study published in July by accountants PKF said occupancy rates at Liverpool hotels for the first six months of 2008 were 6.8% up on last year, while room revenue rates are ahead by 10.9%.

The increases come at a time when the city has also seen hundreds of new rooms come on stream, clearly signalling a massive boom in business thanks to Capital of Culture and the opening of the Echo Arena and BT Convention Centre.

More hotels are planned for Liverpool with the Hilton, located within the Liverpool One retail scheme, due to open next year.

The Ability Group acquired the Hilton for a reported £55m and Knight Frank sees this as a sign the market for investing in hotels remains active despite the credit crunch and economic downturn.

The report says: “Premium (hotel) brands are increasingly being sought in mixed-use developments in order to increase marketability and the value of associated residential and commercial elements. The appetite from debt providers that understand the cash flow of a hotel remains reasonable.”

It adds that, while the northern hotel property market is unlikely to avoid some “turbulence”, two factors remain, which bode well.

Firstly, demand exceeds supply for good quality hotels and secondly, funding is still available for suitable purchasers looking to buy appropriate properties.

As a result of these trends, a significant decline in hotel values is not foreseen. A Knight Frank spokesman said: “Strong locations with continued demand from both corporate and leisure sectors are likely to be protected from the worst effects of a slowdown.

“As such hotels in regional cities such as Liverpool and Manchester could continue to perform relatively well during 2008, so long as new demand does not outstrip supply.”

tonymcdonough