Hotels confront the elements

Property investor and developer Lugano Group has agreed lease terms with Motel One, an ascendant European hotel group. The budget operator has 40 hotels in Germany and Austria and two coming up in Edinburgh, but Newcastle will be England’s first. It will retain existing frontage of High Bridge and create a new build block behind the street in Half Moon Court.

If planning permission is given, building will begin in October for completion by spring 2014. Richard Robson, Lugano Group director, says Lugano plans also to improve the area opposite the site of Motel One, and has started talks about external appearance with High Bridge tenants.

Though one in five hotels in the North East is thought to be under threat of failure, the region’s industry is still one of the best UK performers in the sector.

Newcastle’s hotel occupancy is among the best of any UK city, with room occupancy there 78% against a national average of 65%, according to Visit England. And a new £20m Hotel Indigo has entered the city competition.

A four star boutique hotel brand from InterContinental Hotel Group, it has 148 bedrooms. It replaces the former Eagle Star building in Fenkle Street, near The Assembly Rooms.

A feature of the development by Sanguine Hospitality Ltd is a Marco Pierre White Steakhouse Bar & Grill. The poor summer weather is what presents the threat to North East hotels, says insolvency trade body R3.

About 3% are estimated to be at high risk over the next 12 months. But only hotels in yorkshire, Scotland and London have a smaller percentage in negative reckoning.

A new boutique style hotel of eight guest rooms has been developed and awaits a buyer at 11 Houndgate, a Georgian property in Darlington.

The work of local builder Bussey & Armstrong, it is now on the market through Carver Commercial. It was once a Quaker girls school and later housed the town’s register office.

Also on the market is the Best Western Grand near Hartlepool Marina, with a £2.5m label. It has 50 rooms and, say agents Christie & Co, an average occupancy of 72%.