Hotel sector trends

(last updated August 2020)

What has been happening in the hotel industry

During the last decade or so there have been a number of important developments affecting the hotel industry:

  • the rapid growth of hotel chains which offer very high standards of accommodation even at the budget end of the market. Budget branded hotels have become very widespread and are highly competitive - they can offer significant discounts which independent hotels cannot match and just their presence in a locality can adversely affect the position of the independents
  • the rise of the modern country house hotel and the 'boutique' or 'designer' hotel
  • a significant improvement in the facilities offered by British hotels although there has been criticism of the rates charged
  • the implementation of anti-discrimination legislation which requires hotels to make 'reasonable adjustments' to their premises to make them accessible to disabled people
  • the introduction of a harmonised national grading system for hotels and other accommodation providers (Quality in Tourism in England and aligned schemes throughout the rest of the UK)
  • technological developments - the rise of online travel agencies and booking services like hotel room finder websites such as Trivago and integrated online booking software systems like Eviivo. Some online booking services charge fees amounting to 20% of the room rate
  • the huge success of the TripAdvisor consumer ratings website - a good rating on TripAdvisor is now more or less essential
  • the emergence and growth of 'peer-to-peer' accommodation websites like Airbnb and One Fine Stay (purchased by the Accor hotel chain in 2016) which enable private householders to let out rooms and which are becoming popular with travellers looking to save money on overnight accommodation

Unfortunately there have been many casualties in the hotel trade as a result of the spread of the large hotel chains. Small independent hotels in particular often find it hard to compete with the chains.

Although the mid 2000s was generally a good period for Britain's hotels the late 2000s saw the economy take a dive. The economic climate remained poor during the early 2010s. This had a real impact on the industry which suddenly found that it had more beds than guests and was forced to offer big discounts to try and attract both business and private customers. Things did begin to improve though in 2013 and 2014 was a much better year for the economy and the hotel industry.

The economy continued to improve in the first half of 2015 but slowed in the second half and into 2016. Economic problems are not entirely bad news for the hotel industry as guests who are looking to cut back their expenditure choose to stay in smaller budget hotels. As well as value for money guests value the personal involvement of the proprietor which often leads to repeat bookings. Hotels generally have also benefited from the weakness of the euro economic problems in countries like India and China and the threat of terrorist activity in many traditional holiday resorts. Events held in the UK like the Rugby World Cup in 2015 also give a boost to the hotel trade.

According to industry sources the immediate outlook is positive particularly for hotels in the provinces although growth is likely to be slower. For the best chance of success it's essential to make sure you offer guests what's important to them. Topping the polls are efficient check-in and check-out a comfortable bed and free efficient wi-fi in all rooms.

The challenges faced by smaller hotels include skills shortages the increases in wages costs and the high cost of refurbishment to maintain a standard to compete with the hotel chains.

Keeping up to date with developments

Joining a trade association is an excellent way of keeping up with developments. There are a number of trade associations representing the hotel industry including UKHospitality. Other organisations representing the hospitality sector include the Institute of Hospitality the British Beer and Pub Association and the British Institute of Innkeeping (BII). You can find out more about these organisations on their websites.

The weekly trade journal The Caterer includes many topical articles and features of interest to businesses in the hospitality industry. You can find out more on their website.

Trade shows

You can get a lot of useful information by visiting a trade show or exhibition for the hospitality sector. The Hospitality Show for example is held in Birmingham every two years and attracts a range of hospitality industry suppliers and other related businesses. You can find out more on their website.

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