Hotel & leisure construction boosted by northern growth

Hotel & leisure construction is showing clear signs of regional growth, with approvals rising sharply in the North.

In the three months to February 2026, the underlying value of hotel & leisure construction projects given planning permission (schemes valued at up to £100 million) rose 61% in Scotland, 79% in the North East, and 95% in Yorkshire & the Humber, but barely moved in the South East and fell in the South West and London.

The recent Glenigan Forecast 2026 – 2027 expects the underlying value of UK-wide hotel & leisure construction starts to rise by 5% this year, then rise by 12% in 2027.

Economics director Allan Wilén says: “The introduction of permanently lower business rates multipliers for high-street retail, hospitality, and leisure properties in 2026/27 is also expected to stimulate hotel and leisure construction.

“This measure will reduce long-term operational costs, making investments in new developments, expansions, or upgrades more financially viable for businesses.”

Major pipeline

Glenigan’s construction industry analysis has identified 145 hotel & leisure construction schemes at an underlying level with detailed planning permission and due to start on site this year.

Work coming up ranges from a £1.5 million extension to a Premier Inn at Hessle on Humberside (Project ID: 24206686) to a £5 million revamp of a hotel on Castle Bridge Road in Nottingham (Project ID: 25458268).

Premier Inn is investing substantially in construction work and has 32 projects due to start over the next year. These include upgrades in northern England, such as a £1.4 million extension to a Premier Inn in Crewe (Project ID: 25415776) and a £7.5 million overhaul of a Premier Inn at Warrington in Cheshire (Project ID: 24293722).

Top 100 Presence

Major hotel and leisure construction schemes are also set to boost workload. Four of the largest value projects due to start on site this year are in the hotel & leisure sector, according to Glenigan’s construction industry research, and three are in the upper half of the UK.

The work is spread around the UK, and the largest scheme, ranked 26th, is the £350 million Sage Arena in Gateshead (pictured), where work is anticipated to start this summer (Project ID: 06021815).

The £245 million Goods Station development in Birmingham is the 37^th biggest value scheme due to begin construction in 2026, with an expected start due in September (Project ID: 22020511).

Work began recently on both the £162 million Dunard Centre in Edinburgh – ranked 56^th – comprising a music and arts venue (Project ID: 16431401).

Framework opportunities

A major framework for leisure centre work that could generate £6 billion-worth of opportunities over the next eight years is about to start.

Denbighshire Leisure’s original framework ran from 2022 until this year (Project ID: 21326597) and still has £700 million-worth of work at the planning stage.

A new framework is now being procured that will run from 2026 to 2034 with the potential for an extension to 2036, which would generate work up to £6 billion, or £7.2 billion including VAT (Project ID: 26042944).

The new framework will be used by local authorities to recruit contractors and is expected to start in June.

Strong outlook

With work across the sector coming up and the wider economic situation expected to provide a boost, the hotel & leisure construction sector has a strong outlook.