Hotel restaurant income lower than hoped - council

A flagship hotel which opened as part of a multimillion-pound regeneration of Sheffield city centre has so far not made as much profit as expected after its restaurant struggled, councillors have been told.

The Radisson Blu hotel opened in July 2024 as part of the Heart of the City project in a prime location opposite the town hall.

A report to councillors said while the hotel was one of the best performing in the city centre, its financial performance had been impacted by its restaurant's food and drink income being lower than expected.

A spokesperson for Radisson Blu said the hotel had been "performing exceptionally well" and it had seen significant year-on-year growth since opening.

The report to Sheffield City Council's finance and performance policy committee said that overall the £430m Heart of the City scheme had been a success.

It stated that the authority wanted to "build a constructive relationship" with the owners of the award-winning hotel to improve the performance of its rooftop restaurant.

"The hotel offers high quality hospitality designed to elevate Sheffield's city centre visitor experience," according to the report.

"Since its opening, the hotel has quickly become one of the city centre's best performing hotels, regularly achieving the highest room occupancy and rate in its comparator group," it said.

"The hotel has proved to be popular for meetings and events, with promising new bookings and repeat business helping build revenue towards achieving the level expected in the business plan."

However, the report added that the finances of the hotel had been affected by its food and drink income being lower than expected.

It adds: "While the hotel has fantastic facilities, including an impressive rooftop restaurant and bar, the original restaurant concept of Indian Tapas was not a success.

"Despite a change of concept, better promotion and greater cost control, the hotel has yet to meet its budgeted net income.

"The hotel business plan has been updated to include revised income projections based on the above and also reflect the impact of costs that have risen above the original assumptions, notably employer's national insurance, national living wage, energy and the inclusion of owner's costs excluded from the original business plan."

The Radisson Hotel Group spokesperson said there had been a strong start to 2026, with significant year-on-year growth since 2024, and it looked forward to continuing the momentum.

"Any new hotel opening typically requires up to three years to fully establish and stabilise its performance", the spokesperson said.

"Since opening in 2024, the hotel has been performing exceptionally well in what is a highly competitive market.

"The hotel's rooms and meetings and events business has exceeded expectations and both continue to deliver strong results.

"The food and drink concept has been adapted to reflect demand and we are pleased to see a consistent increase in footfall and customer usage since the change. This will remain a key focus for us."

The council said the Heart of the City estate was forecast to generate a net operating income of £7.5m in 2025-26 and should be fully occupied by April 2028.

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