A report published by the Department for Enterprise, Innovation and Networks at the Welsh Assembly Government has revealed that demand for new serviced accommodation in south Wales is expected to increase by nearly 16 per cent within the next four years.

The increase equates to nearly 400,000 room nights a year, or 1,700 hotel beds, and means that “significant new opportunities” across the hospitality sector in south Wales could be created.

The report focused on 12 authorities in south east Wales including Bridgend, Cardiff, Merthyr Tydfil, Monmouthshire, Newport and Swansea and identified current supply and demand by market segment.

Cardiff dominated the report, with current demand estimated to be around 2.4 million room nights per annum and accounting for 38 per cent of demand, or around 926,000 room nights a year.

Swansea was the next leading single destination with 16 per cent, or 400,000 nights a year with the rest of the region accounting for the remaining 46 per cent, or 1.13m room nights.

More than half of current demand – 57 per cent – within the sector came from business travel and conferences, with 18 per cent coming from short breaks and holidays while activity surrounding the Millennium Stadium accounted for a further 5 per cent.

Regional annual demand is estimated to grow to 2.85 million room nights a year by 2010. In terms of regional annual hotel demand, Cardiff is predicted to continue to be the main focus, with growth in the Welsh capital expected to increase by 18 per cent, followed by Swansea with 17 per cent and Neath Port Talbot at 13 per cent.

Commenting on the report, Andrew Davies, minister for enterprise, innovation, and networking in the Welsh Assembly Government said: “This report quantifies demand for new hotel development in the southern part of Wales over the next four years. This is an ideal opportunity for potential developers to take advantage of a growing market.

“Wales needs new beds, of all types, for all sorts of different visitors and hopefully this report provides a degree of analysis and clarification as to where the demand is expected to be focused.” Details: www.wales.gov.uk

Photograph: St David’s Hotel, Cardiff