Hotel Futures Economic Impact Assessment (Oldham Council)

We were commissioned by Oldham Council to carry out an economic impact assessment of its proposals for a training hotel in the town. This involved an assessment of four options, one of which was an ‘academy’ hotel (Hotel Futures) that aims to become a centre for training hotel apprentices, with 120 rooms, an all-day-dining restaurant, bar, 2,350 sq m of meeting / conference space, an indoor pool, an exercise room, a spa and a business centre.

Our assessment covered the gross and net additional employment impact of the proposals as well as the forecast increase in Gross Value Added (GVA). Analyses were undertaken at the Oldham level. The net additional analyses took into consideration:

• leakage – the proportion of outputs that benefit those outside of the target area – this was based on Census travel-to-work data, with an adjustment made for the fact that many of the jobs created would be low-skilled, which would predominantly attract local residents. Leakage was therefore set at 30%;
• displacement – the proportion of the proposed development’s outputs accounted for by reduced outputs elsewhere in the target area – a low displacement rate of 15% was assumed, based on the fact that the new hotel would be of a significantly higher quality than the existing offer;
• multiplier effects – further economic activity associated with additional local income and local supplier purchases – a figure of 1.2 was used, consistent with government guidance;
• deadweight – outputs which would have occurred without the proposed development – this was set at zero as no alternative scheme on the site would have been delivered.

Our assessment showed that, at the Oldham level, significant benefits would be delivered to Oldham through the development of a training hotel.

This assignment demonstrated our team’s ability to convert estimated visitor numbers into indirect jobs and GVA through analysing potential visitor spend. It also showed our ability to take into consideration particular local circumstances and the needs of particular sectors when assessing additionality.