The UK’s hotel industry is booming.

Over 140 new hotels have opened in the UK over the past 12 months – 64% of which were budget hotels, a survey by the British Hospitality Association (BHA) has revealed.

The survey, British Hospitality: Trends and Statistics 2007, also estimates that £3 billion was invested in the UK hotel industry from August 2006–August 2007, in the form of re-launches, refurbishment and modernisation.

London was cited by the survey as the city with the most new developments – 19 hotels totalling 2,700 rooms – with Manchester, Liverpool, Newcastle-on-Tyne and Edinburgh also seeing new developments.

Although such growth within the industry is positive, the survey also mentions that one of this year’s developments could have a negative impact on the hospitality sector.

It refers to this year’s scrapping by the Government of the Hotel Buildings Allowance – an annual 4% tax concession for hotel owners for the first 25 years of the hotel’s life, designed to encourage investment in the hospitality sector.

Bob Cotton, BHA’s Chief Executive, explained: “Trends and statistics show that we have a buoyant industry but with plenty of challenges ahead. There has never been a time when there has been more investment in the UK hospitality industry, but we must make greater efforts to promote the UK as a domestic holiday destination.

“Trends show that UK domestic holidays declined in 2006 while overseas holidays boomed; we must try to reverse this trend and encourage more British people to holiday at home. These new hotel developments will help us achieve this aim.”

The BHA predicts a similar positive productive pace of construction leading up to the UK’s 2012 Olympic Games.