UK Hotels Market Report 2020
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Report Summary
Everything you need to make the right decisions
Providing the most comprehensive and up-to-date information and analysis of the Hotels UK market including the behaviours, preferences and habits of the consumer.
Mintel has the answers you’re looking for
What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?
Covered in this report
The events of 2020 have triggered a collective urge for indulgence and escapism. 74% of people who would consider staying in a hotel in the coming months agree that ‘Booking a luxury hotel to escape everything appeals to me’. The roll-out of the vaccination programme will help to release pent-up demand for leisure travel among UK consumers. However, inbound travel will be slower to bounce back. Hotel revenues slumped overall by an estimated 70% in 2020 and are not expected to return to pre-COVID levels until 2025
Expert analysis from a specialist in the field
Written by John Worthington, a leading analyst in the Travel sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
When the UK finally emerges from its COVID nightmare there is likely to be a surge of interest in experiences such as luxury hotel weekends away as people celebrate the return of normal life. Special occasion breaks cancelled during the pandemic (milestone birthdays etc) will offer particular opportunities. Over-50s have been the least inclined to visit hotels in recent months but plans to vaccinate this group by Easter 2020 should see a release of pent-up demand among older travellers.
John Worthington
Senior Travel Analyst
Table of Contents
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Overview
- Key issues covered in this Report
- Economic and other assumptions
- Products covered in this Report
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Executive Summary
- Impact of COVID-19 on hotels
- Figure 1: Short-, medium- and long-term impact of COVID-19 on hotels, 1 December 2020
- The market
- Domestic leisure stays will begin recovery in 2021 but inbound revival will be slower
- Supply reduction and permanent loss of business travel will keep volumes below pre-COVID levels over the next five years
- Figure 2: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2015-25
- Figure 3: Total value forecast of hotel/motel/guesthouse nights (domestic and inbound), 2015-25
- Companies and brands
- Top 10 UK hotel groups are led by Premier Inn
- Figure 4: Top 10 hotel operators in the UK, by estimated UK site numbers, December 2020
- Branded chains are growing their market share
- The post-COVID hotel
- The consumer
- Budget and mid-market hotels are equally popular
- Figure 5: Type of hotel used for last visit, September 2020
- Pent-up demand for mini-breaks
- Hotels will have to work hard to win back the business traveller
- Figure 6: Purpose of last hotel stay, September 2020
- A third of adults would stay in a hotel before the pandemic is fully resolved
- Figure 7: Percentage of those feeling ‘comfortable’ about staying in a hotel, July-November 2020
- Health & safety is vital while COVID remains a threat but hotels need to strike a balance
- Figure 8: Preferred health & safety measures when booking a hotel, September 2020
- The great escape
- Room as cocoon
- Figure 9: Preferences and behaviours when staying in a hotel in the next six months (continued), September 2020
- Impact of COVID-19 on hotels
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Issues and Insights
- Automation and the post-COVID hotel
- The human touch
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The Market – Key Takeaways
- 2020 crash followed record high in 2019
- Regions to lead the recovery in 2021
- The budget sector is likely to grow its market share as the economic fallout from COVID takes effect
- Closures and reduced pipelines are likely to delay recovery
- End of free movement will bring staffing problems
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Market Size, Segmentation and Forecast
- Domestic leisure demand will kick-start recovery in 2021
- Figure 10: Short-, medium- and long-term impact of COVID-19 on hotels, 1 December 2020
- Revenue growth up 19% in four years before COVID
- Figure 11: Total volume and value of UK hotel/motel/guesthouse stays, 2015-20
- Inbound travel was the main engine of growth
- Figure 12: Volume and nights of domestic stays in a hotel/motel/guesthouse in Great Britain, and volume and nights of inbound stays in a hotel/guesthouse in the UK, 2015-20
- Business travel had already slowed prior to the pandemic
- Figure 13: Volume of domestic stays in a hotel/motel/guesthouse in Great Britain, and volume of inbound stays in a hotel/guesthouse in the UK, by purpose, 2016-19
- Hotels have lost an estimated 70% in revenue in 2020
- Regions to lead recovery in 2021
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- Figure 14: Hotel performance measurements (actual, estimate & forecast), London and UK regions, 2019-21
- Impact of recession: 2008-09 versus 2020-21
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- Figure 15: Volume of domestic and inbound hotel/motel/guesthouse stays, 2008-12
- Stays are still expected to lag pre-COVID levels in 2025
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- Figure 16: Total volume and value of UK hotel/motel/guesthouse stays, 2015-25
- Forecast charts
- Figure 17: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2015-25
- Figure 18: Total value forecast of hotel/motel/guesthouse nights (domestic and inbound), 2015-25
- Domestic leisure demand will kick-start recovery in 2021
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Market Background
- The COVID-secure hotel
- The contactless hotel
- End of free movement will create more challenges for a recovering hotel sector
- More staff, less staff?
- Or better rewarded/motivated staff?
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Companies and Brands – Key Takeaways
- Premier Inn & Travelodge lead the top 10
- Branded share has risen but the market remains fragmented
- Post-pandemic consolidation is likely
- COVID legacy trends
- New concepts and launches
- Premier Inn and Hilton are the strongest brands in Mintel’s research
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Market Share
- Premier Inn and Travelodge are the leading UK hotel groups
- IHG, Best Western and Accor are the next biggest
- Hilton is the largest full-service/upscale group
- OYO sees an opportunity in the unbranded budget sector
- Marriott, Wyndham and Britannia are the remaining top 10 brands
- Figure 19: Top 10 hotel operators in the UK, by estimated UK site numbers, December 2020
- Branded market share rose by nine percentage points over the last decade…
- …and COVID will accelerate this trend
- Further consolidation is likely as the industry emerges from the pandemic
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Launch Activity and Innovation
- Luxury ‘nearcations’
- WFH (Work From Hotel)
- Aparthotel trend
- In-room wellness
- In-room entertainment
- New launches/concepts
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Brand Research
- Airbnb usage still lags behind the big hotel brands
- Brand engagement is low across the industry
- Figure 20: Key metrics for selected brands, November 2020
- Hotel usage demographics
- Figure 21: Previous usage of hotel brands, by socio-economic group and household income, November 2020
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- Figure 22: Previous usage of hotel brands, by generational group, November 2020
- Hilton scores highly on differentiation and trust combined
- But Premier Inn is the most trusted brand overall
- Mid-market brands struggle to stand out
- Airbnb has the clearest brand identity but has trust issues
- Figure 23: Key attitudes towards selected brands, November 2020
- Premier Inn has a wider appeal than Travelodge
- Hilton is seen as worth paying a premium for
- Innovation is Airbnb’s core strength but hotels are still ahead on value
- Figure 24: Further attitudes, by brand, November 2020
- Mid-market brands can offer an affordable luxury alternative
- Premier Inn is seen as more fun than other brands
- Figure 25: Brand personality – macro image, November 2020
- Premier Inn and Hilton have the strongest brands overall
- Figure 26: Brand personality (continued) – micro image, November 2020
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The Consumer – Key Takeaways
- Millennials like to splash out on luxury
- Pent-up demand for mini-breaks
- 35% of consumers are likely to consider staying in hotels before the pandemic has ended
- Health & safety priorities
- Luxury escape
- Renewed focus on the room experience
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Impact of COVID-19 on Consumer Behaviour
- COVID concern levels have plateaued around 50%
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- Figure 27: Level of concern* about COVID-19, March-November 2020
- Travel plans remain on hold despite positive vaccine news
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- Figure 28: Holiday booking and intentions, August 2019-November 2020
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Hotel Usage
- Two thirds of adults have stayed in a UK hotel over the past three years
- Figure 29: Usage of overnight accommodation in the past three years, September 2020
- The pandemic has affected hotels more than rental brands
- Figure 30: Percentage of those feeling comfortable about travel activities, July-November 2020
- Under-45s are currently the most comfortable about staying in a hotel…
- …but the vaccination roll-out could change this
- Two thirds of adults have stayed in a UK hotel over the past three years
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Types of Hotel
- Budget & mid-market hotels are equally popular
- Figure 31: Type of hotel used for last visit, September 2020
- Older guests prefer mid-market comforts
- Millennial travellers are willing to splash out on occasional luxury
- 17% of £75K+ income households stayed in a luxury hotel on their last trip
- Figure 32: Type of hotel used for last visit, by socio-economic group and household income, September 2020
- Budget & mid-market hotels are equally popular
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Purpose of Stay
- Leisure mini-breaks are the mainstay of the domestic market
- One in five guests take leisure breaks of more than three nights
- Figure 33: Purpose of last hotel stay, September 2020
- Mini-break market will rebound from COVID but some business travel may never return
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Hotel Usage and Intentions During the Pandemic
- Hotels have seen half the normal number of UK guests in 2020
- Figure 34: Timing of last hotel stay, September 2020
- Around 35% of adults would consider staying in a hotel during the ‘final’ COVID phase
- Figure 35: Interest in staying in a hotel in the next six months, September 2020
- Half of those reluctant to return are put off by health & safety measures
- Figure 36: Reasons for not wanting to stay in a hotel in the next six months, September 2020
- Hotels have seen half the normal number of UK guests in 2020
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Preferred COVID-19 Health & Safety Measures
- The key measures to reassure guests
- The ‘germ-aware’ traveller could be here to stay
- Figure 37: Preferred health & safety measures when booking a hotel, September 2020
- Women prefer a more visible health & safety approach
- Figure 38: Preferred health & safety measures when booking a hotel, by gender, September 2020
- Under-45s are more comfortable with low-contact hotels
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Current Preferences and Behaviours when Staying in a Hotel
- R rate remains a key factor
- Last-minute booking will be the norm for some time
- COVID-secure and COVID-lite
- Figure 39: Preferences and behaviours when staying in a hotel in the next six months, September 2020
- Younger generations are more likely to trust branded hotels
- Figure 40: Agreement with the statement ‘I’m more likely to trust the health & safety procedures at a branded hotel chain than an independent hotel’, by age and gender, September 2020
- Luxury escapees
- Pent-up demand for special occasion breaks
- Cocooning
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- Figure 41: Preferences and behaviours when staying in a hotel in the next six months (continued), September 2020
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
About the report
This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.
Market
Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.
Consumer
Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.
Brand/Company
Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.
Data
Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.
*databooks not available with UK B2B Industry reports.
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