Gap for ‘high-end’ hotels in Margate – but has the appetite to build them waned?

News of the £20m renovation project to turn the Nayland Rock Hotel and neighbouring Royal Crescent buildings into a restaurant, function space,16 serviced apartments and 50 flats has raised questions over the loss of hotel space in the town.

The Nayland Rock has been a hotel since 1885. It shut closing temporarily during the First and Second World  Wars bit once again thrived during the heyday of British seaside holidays, before declining as cheap overseas flights drew tourists abroad.

The hotel closed in 1982 but reopened in 1990. However, tourist numbers were falling and a brief stint as a base for coach tours with older people was not enough to sustain it.

From 2000–2008, it was used for asylum seeker accommodation on behalf of the government and then served as temporary accommodation for workmen and foreign students.

A resurgence in Margate as a tourist destination, sparked by the opening of Turner Contemporary in 2011 and reopening of Dreamland in 2015 (and again in 2017), led to renewed holiday accommodation demand, with boutique and ‘luxury’ venues predicted to be needed for the newest influx of visitors.

One such scheme was the rebirth of the Fort Road Hotel.

The property had been empty for some 22 years. Initially compulsorily purchased by the council in May 2010 for use as a boutique hotel, plans failed to materialise. At one point there was agreement to turn the building into social housing but this too failed.

In 2018, the site was bought at auction and it reopened as a boutique hotel in 2022.

Local Plan

In Thanet’s Local Plan (adopted in 2020) the council identified high demand for additional hotel accommodation within the district as a result of the growing tourist economy across Thanet.

Thanet visitor survey research last year noted “gaps in Thanet’s accommodation market include high-end hotels, family-friendly lodging, self-catering and boutique accommodation.”

It added: “The study identified a growing market for accommodation catering for large scale events, the cultural and creative market, and accommodation for film crew.

“Other gaps were identified as high-end serviced accommodation and coastal glamping.”

Stalled proposals

But, if there is demand for 4 and 5 star hotels beyond those that the town already offers, the number of proposals which have failed to come to fruition suggests the appetite to fund schemes to meet it has waned.

For the Nayland Rock Hotel there have been plans since 2017 to create a luxury hotel but these were downgraded and then ditched altogether.

Brede Hotels acquired the site – through Town Pension Trustees Ltd- for £1.75m in 2016 with a view to relaunching it as a luxury hotel.

The first proposal in 2017 was for a luxury hotel with beach huts and beachfront café at the promenade. The proposal included 79 rooms; 200 cover restaurant; large function room; gym and spa; external terrace; lounge and lobby; along with the “beach hut” units along the promenade.

However, Brede Hotels Limited, whose directors included former Sands Heritage boss Nick Conington until his resignation in 2019,  were not able to secure investment.

By 2022, the ambitions had been scaled back to concentrate on a spa hotel with 79 rooms; 1 serviced apartment; 140 cover restaurant and 60 cover breakfast lounge; guest only spa and gym; bar; lounge; and external terrace; with some small commercial units on the promenade.

Due to increasing costs the hotel plan changed, removing the spa and including suites for longer stay. A total of 47 serviced apartments were proposed, with 30 cover restaurant; bar and gym.

This proposal also failed to gain traction and later in the year, the architects (Holloway) came forward with a further plan seeking return to the historic terraces, reusing existing entrance doors and scaling back the previously proposed extensions.

For the first time, the proposal sought a change of use to residential, with 26 private market units alongside Airbnb and short term holiday lets. This proposal was presented to officers formally in December 2023 and discussions were ongoing for over a year, prior to a formal written response in March 2025.

An amended proposal then followed with a restaurant at lower ground floor level, with five serviced holiday apartments above.

The latest plans, minus a commercial hotel element, were submitted in February this year.

And the Nayland Rock plans are not the only ones to fall by the wayside.

In 2013 Guy Hollaway Architects were appointed by Kent County Council for a plan to create a 60-bed ‘destination’ hotel and restaurant with multi-coloured shutters on the seafront at the Rendezvous site by Turner Contemporary but this did not come to fruition.

The scheme for the hotel, restaurant and 18 apartments was granted planning permission in October 2014 and minutes from this time reveal the authority had hoped the hotel would be built and open by Christmas 2017.

But the £10 million plan was mothballed because KCC needed “third-party funding” to bring it to fruition.

In 2018, a seven-storey, 117 bed hotel in Cliftonville was granted planning permission by Thanet council.

Guy Hollaway Architects submitted the application for the multi-coloured hotel on the corner of Ethelbert Crescent in Cliftonville.

The building, proposed for Hosers Corner, was to have a unique multi-colour metal façade, which the architects said “ reflects the famous Margate deck chair and plays on the regeneration of tourism and culture that is being seen throughout this eclectic seaside town.”

The hotel was expected to cater to the rise of artists moving into the town attracted by the rejuvenation of Dreamland, Turner Contemporary and the new Carl Freedman gallery  and Tracey Emin studios at the former Thanet Press building in Union Crescent.

No movement has been made on the plans since that date.

In 2019, plans to build a 124 bed hotel on Margate seafront were approved.

The six storey hotel was to contain a gymnasium, meeting rooms, a shop or café with frontage onto Marine Terrace, a restaurant and bar at the ground floor and a rooftop bar.

Plans were brought forward by Margate Estates, then the parent company for Dreamland, and recommended for refusal by planning officers who argued the design compromised views of the Grade II* listed  cinema building and were at odds with the town’s Seafront Conservation Area aesthetic.

Under the proposals Ziggy’s rooftop bar and an adjoining empty building were to be flattened. The space at ‘Godden’s Gap’ where the amusement arcade stood, was also to be used.

At that time Aidan de Brunner, then a representative for Dreamland, said the development would be a “catalyst” for regeneration. He told the packed chamber: “Dreamland is turning away business because there is nowhere to stay; there are no quality hotels – the nearest 120 bed hotel is 15 miles away.”

No progress appears to have been made on the project since.

In 2020, Margate Football Club submitted a planning application for stadium redevelopment at its site, including the East Stand, Coffin End (North Stand), a 120 bed hotel and further facilities.

The application was developed with hotel partner IHG Hotels and the brand Holiday Inn Express to reflect increased demand for hotel rooms in Thanet. It was also aimed at providing a first-class facility for all teams and a sporting hub for the community.

The East Block was to be used for a 120-bedroom hotel together with restaurant and bar facilities.

However, an proposal lodged this month is to build a 59 bed co-living building with new south end terrace following demolition of existing south end terrace and car park.

Planning documents say the aim is to create the co‑living rooms with high‑quality communal facilities and professional management on an urban brownfield plot at the south stand of Margate FC.

The club adds that it “addresses documented local need—particularly for single‑person households facing affordability and quality issues.”

In 2021, planning permission was granted for the creation of a 40-bed hotel in Cliftonville.

The development, submitted by Long Eaton Development Ltd, was to be in Northdown Road at the empty plot of the former Beano café and amusement arcade which were gutted in a blaze in 2009.

Planning documents said the venture would create “a boost to local employment, the redevelopment of a vacant brownfield site in a sustainable location, and the delivery of a mixed-use scheme.”

The council approved a Certificate of Lawful Development to say work has started on the scheme last year although the works were just trenches and trial pits.

In 2024, The Selina Hotel in Cliftonville shut down after owners Selina Hospitality went into administration.

The hotel, in Eastern Esplanade, opened with a soft launch at the end of 2022 at the site of the former Smiths Court Hotel.

The same year it was confirmed the Somerville Hotel in Westbrook would be converted to a House of Multiple Occupation

Sands Hotel in Margate also shut in 2022 but the site was taken over and is now NO 42 guesthouse.

Rise of Air BnB

One type of holiday let that has expanded over the years is the Air BnB market, suggesting a shift from serviced accommodation to self-catering.

In 2018, Airbnb accounted for 9% of accommodation used by visitors to Thanet, by 2025, it had risen to 20%. However, 2025 tourism data shows that Airbnb listings have plateaued, possibly due to a saturated market. In May 2025, there were 1,421 active listings on the platform across the three towns, a figure that has remained stable over the past three years. The greatest number of listings – 799- were in Margate.

Thanet tourism

There were 4.6 million visitors to Thanet in 2023, close to pre-pandemic levels in 2019, with tourism valued at £349 million. However, only 500,000 of those visitors stayed overnight.

Thanet research does show that visitor numbers from London have increased and there is also a steady overseas market with German tourists accounting for the largest proportion, followed by Australians and then the French.

National picture

A report by real estate experts Savills in September  2025 noted that UK hotel investment volumes totalled £3.01 billion year-to-date, down -28.6% year-on-year  due to fewer portfolio deals.

However, single-asset transactions surged, 38.3% above the ten-year average, with strong activity in London and several regional markets.

Savills say that going forward, costs will remain a challenge, particularly staffing costs, whilst business rates for some hotels will also prove tricky. The use of technology will remain pivotal for hoteliers to successfully adapt to the current high-cost environment.

They add: “With construction costs set to remain elevated, the pipeline of new rooms (hotels), those under construction or in final planning, is less than pre-pandemic levels.

“As a result, supply growth is expected to remain relatively flat in the coming years.”

The way forward?

The biggest growing tourism trend is for experience-led and wellness destinations, These are noted in Thanet’s 2025 research, which says: “Food and other immersive experiences, cool-cations and wellness/health are prominent trends that offer opportunities for Thanet.”

A report by private capital specialists Charles Russell Speechlys says: “Guests are increasingly choosing flexibility, lifestyle and experience-led stays over one size fits all stays. Experience-led in practice means hotels designing and programming stays around moments guests value, not just the room.”

They add: “Wellness (will be) treated as a core pillar rather than an add on, with hotels building spas, recovery therapies, outdoor programming and sleep optimisation into an integral part of the stay.” Thanet examples would include No 42 Margate and The Yarrow in Broadstairs.

Perhaps that plan for a spa hotel at Nayland Rock could be revisited after all…