If a visitor to London could name their ideal base, it would probably be a hotel close to theatreland, a stroll from Covent Garden and on the doorstep of the capital's business centre. It is, therefore, surprising to learn that until recently hotel operators have largely ignored High Holborn in London WC1.
High Holborn has sometimes suffered from having a mid-town label: a no-man's-land sandwiched between the glitz of the City and the glamour of the West End. But now, at last, operators are recognising the street's potential for attracting tourists and business travellers alike.
A fistful of second-hand office blocks are gradually being bought up and transformed into hotels to cater for the under-bedded capital. It is a phenomenon that has prompted experts, such as Clive Leigh of property agent Jones Lang Wootton, to predict the area could become London's new Bayswater.
The past year's biggest news was the £27.5m sale of the former Pearl Assurance headquarters on High Holborn to Renaissance Hotels, now part of Marriott, for conversion into a 335-room, five-star property planned to open in 1998. The grandiose Victorian building was bought for less than half that sum only months before by Malaysian investor Wingfield. Its jump in value is seen by some as a pointer to how competitive central London's hotel market has become.
Jim Fisher, senior vice-president of international hotel development at Marriott International, believes Renaissance's choice of the Pearl building was a wise one. "Holborn is a very strategic, emergent market location with strong long-term prospects," he says.
Fisher is not alone in this belief. In June, apartment-hotel operator Orion led the field by converting Turnstile House, at 94-99 High Holborn, into 152 two-person studio apartments and 40 four-person apartments. Orion underlined its confidence in the destination by taking a 15-year lease at £1.2m a year, alongside a profit-share scheme with its landlord.
Leigh believes Orion's concept will prove a winner with business people and tourists visiting London. "People coming to the capital for training courses don't want to be stuck in a hotel bedroom for a week. And tourists can spend a few days at a time there."
The spurt of new developments continues around the corner on Southampton Row, where property experts predict that the recently acquired Victoria House building will also be converted into a five-star hotel by owner Blackfriars Investments. And on nearby Aldwych, Hemisphere Hotels is developing a 120-room hotel at Inveresk House.
As baggage replaces briefcases and restaurants replace canteens in Holborn, all the new and potential hotel developments share one thing in common: they are conversions of second-hand - often virtually redundant - office buildings. Indeed, three-quarters of all London's planned hotel openings in the next three years will be conversions of old office stock.
In recent months, it has sometimes seemed as if every available Holborn office block has attracted the interest of a hotel operator of some sort.
For example, Martin Roberts, of chartered surveyors Knight Frank, says that First Avenue House on High Holborn was looked at by several three-star operators as well as a "backpacker-type operator" when its resident Government office occupiers considered relocating earlier this year.
Sir Rocco Forte is, meanwhile, known to have bid for the Pearl building, and Whitbread's Travel Inns, which already has new projects at Putney Bridge and Euston Road, is among those scouting for sites in the area.
Fuelling all the conversion activity in recent years has been the impact of the recession on mid-town office prices. "The office market was depressed. Normally, office users will outbid hotel users. But prices became sufficiently lower and hotels became a more viable option," says Roberts.
Sites were opened up that might otherwise have remained out of bounds, he adds. However, as the market now recovers, Roberts warns that hoteliers should act quickly if they are looking to move in because office values could rapidly increase. New corporate occupiers, like Andersen Consulting at the old Mirror Group Newspapers' site at Holborn Place, are already helping step up the race for space.
But there is still hope for those wanting to wedge a foot in Holborn's door. "Some of the more ornate buildings, with all the grandeur of their Victorian design, may still hold more value as a hotel but no particular appeal for office occupiers," says Roberts. "With a big marble entrance hall, a hotel can make a feature of it, but this is less than ideal for office users. The Pearl and Victoria House buildings are good examples of this. Both of these are not good office buildings but cracking hotel sites."
Among the opportunities that still exist for hotel operators in the area are the Blackfriars building on New Bridge Street, offering 80,000sq ft of space and now on the market as a standing investment.
Apart from cost, the relative ease with which planning permission is won in the area is serving to bolster hoteliers' interest in Holborn. "We have got a planning authority - Camden - which is positive towards hotel developments," says Stephen Potel, of Knight Frank's hotel division. "They realise a lot of buildings are no longer any use for their original design as offices, and there is a shortage of bedrooms in the area."
Stuart May, of management consultancy Pannel Kerr Forster, which published its London Hotel Trends 1997 report earlier this year, agrees. "For many years there have been all sorts of planning restrictions for new hotel developments. Most of the London boroughs have been extremely strict. However, now there is a willingness for planning authorities to consider changes of use," he says.
In future, Holborn's main problem is likely to be simply squeezing all the hotel guests in. With estimates showing that London needs another 10,000 hotel beds by the new millennium, any new rooms are unlikely to remain empty.
While many budget brands have been scanning Holborn for a while, Roberts says currently there is increasing interest in the area from upmarket operators, which promises to keep visitors of all income brackets content.
Holborn's central location, combined with the fact it is likely to be cheaper than its West End counterparts, remains the key attraction. "Holborn is ideally placed," says May. "It is in the vicinity of theatreland and within easy striking distance of all the major tourist attractions."
With all this new interest in Holborn, it is not surprising that property prices are rising. Roberts estimates that an occupier can now expect to pay around £100 per sq ft for a decent freehold in High Holborn, whereas 12 to 18 months ago it would have been closer to £60.