City marketing chief says Liverpool is on course to have a 5-star hotel by 2030

Just as the Capital of Culture sparked a massive investment in the visitor economy throughout the 10 years after it, Eurovision will do the same.

Marketing Liverpool director Chris Brown says the world-famous Song Contest will create a different kind of market boom which will finally attract a 5-star hotel to the city.

He says: “It will be more of people wanting to be in the city, wanting to work in the city, and it will be a great place to attract talent.

“Over the next 10 years we will see a lot more business development, a lot more inward investment, and I think that will bring a better-balanced visitor economy which is what is needed.”

And Chris adds: “Within that I would say, before 2030, we will see a 5-star hotel in Liverpool.”

The discussion about why Liverpool hasn’t got a 5-star hotel has always been a hot topic.

“It’s been going on over the last five or six years,” continues Chris, “which is interesting when you consider back in the ‘90s we only had six hotels in the city centre compared with 85 now!

“As a result of the visitor economy booming and accelerating after Capital of Culture, these debates start to happen – just like you do about a Michelin-starred restaurant which I also think we’ll have before 2030 – and everybody’s looking for more and more quality.

“When I started in Marketing Liverpool, we were talking about how we could grow the economy and take things forward, and now you get a different nuanced conversation about what parts of the economy are missing, and what parts of the product are missing, that would make us an even better city. 

“Having a 5-star hotel would be a signature moment – it’s a statement more than anything – but the lack of one doesn’t stop the destination progressing and developing.”

Chris says the reason why Liverpool doesn’t have a 5-star hotel lies in the fact it doesn’t yet have the levels of corporate business in the city that would maintain the rate structure required to operate one: “We are very much a leisure destination and until there is more sustained growth within the wider economy it’s unlikely that an out-and-out 5-star would take the commercial risk,” he says.

The ideal balance hotels are looking for is an even occupancy and average room rate per hotel night, seven days a week. In hotel terms that splits out to Monday to Thursday, and Friday to Sunday – or the ‘business week’ and the ‘leisure week’.

“But if you look at a snapshot of Liverpool’s current hotel economy,” says Chris, “what you find is we have lower occupancies and lower average room rates compared with our competitors Monday to Thursday, and proportionately a much higher average occupancy and a higher average room rate from Friday to Sunday.

“It’s a reflection of the fact Liverpool’s primary attraction is as a leisure city destination, we attract a lot of visitors. In other cities, Manchester, Birmingham, and Leeds, it’s more balanced, so they have fewer leisure visitors and more business conference and corporate business, and it’s that corporate business that drives the market Monday to Thursday.

“It’s a challenge we’ve known we’ve had for some time, and one of the legacies that has to come out of Eurovision is that we entice more end-users, more corporate businesses, more start-ups, more expanding businesses here, that will give a bigger dynamic to that Monday to Thursday.

“If you’re operating a 5-star hotel, your operating costs are significantly higher because you have to run a certain level of service, it’s high-intensity staff wise, and you have to work on an established minimum room rate – you can’t suddenly say tonight instead of charging £200, we’re going to charge £50. 

“We’ve had operators who’ve looked at potentially bringing a 5-star hotel here, but they want to see more of a balance across the midweek and the weekend. The weekend isn’t a problem, that’s in 5-star rate territory without a doubt, but a lot of hotels put their rate up at the weekend to compensate for business Monday to Thursday, with exceptions only when there’s something like the Labour Party Conference or an international conference at ACC.”

The nearest we came to having a 5-star was Martins Bank building in Water Street with Principal Hotels before they sold to Kinrise, says Chris, when, in 2017, a £50 million plan was to transform it into the city’s first 5-star hotel with more than 138 bedrooms, a restaurant and spa. “But even they could not make the figures stack up.

“At the moment it’s purely a timing issue, and an issue about the type of audiences we currently attract to the city that makes it difficult for a 5-star operator to come into the marketplace.

“Eurovision will help too because it will encourage international visitors who historically tend to want to stay in higher quality hotels, both in the leisure and corporate market. So over the next 10 years, as things start to develop, I would be very surprised if we don’t have either a Michelin-starred restaurant or a 5-star hotel.

“We have an impressive range of high quality 4-star hotels that you could argue provide near to 5-star service already and new recent entrants such as the INNsiDe by Melia, Novotel Paddington Village, and the MGallery, the latter having just opened after the owners spent three years bring a grand building back to life, to ensure the highest quality. 

“So yes,” Chris concludes. “There’s a few missing ingredients to be attractive to a 5-star operator just now, but it will come.”

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