Hotels - UK - November 2018

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The market
Record highs in 2017, but slight dip expected in 2018
Figure 1: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2013-23
Figure 2: Total volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 2013-23
Companies and brands
Branded chains control an estimated 50% of market
Big two budget chains account for an estimated 14% of rooms
Figure 3: Top 10 hotels in the UK, by site numbers, October 2018
The consumer
Consumer demand has dipped…
Figure 4: Use of hotels in the past 12 months, August 2014-September 2018
…but frequent guests have increased
Figure 5: Number of hotel stays in the past 12 months, September 2018
62% of guests go budget
Figure 6: Types of hotel stayed in during the past 12 months, September 2016-September 2018
OTAs assert control
Figure 7: Overall channels to market used for last hotel stay, September 2015 and September 2018
Food and personalisation are key ways for hotels to stand out
Figure 8: Factors that can attract hotel guests, September 2018
Super-budget hotels grow but most consumers are prepared to pay for a better experience
Figure 9: Attitudes towards hotels, September 2018
Hotels preferred to Airbnb
Figure 10: Attitudes towards hotels versus Airbnb, September 2018
What we think
ISSUES AND INSIGHTS
Engaging the Airbnb generation
The facts
The implications
Luxury/budget polarisation amongst Millennial travellers
The facts
The implications
Mix-and-match guests
The facts
The implications
Personalisation is the key to loyalty
The facts
The implications
Embracing wellness trends
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Hotel stays and nights reach record levels in 2017...
…but demand has softened in 2018
Brexit uncertainty ahead
2017 marked a new staycation high
US and Chinese visitor spend rising
MARKET SIZE, SEGMENT PERFORMANCE AND FORECAST
Inbound visitor surge takes hotel stays to new high in 2017
Figure 11: Total volume of trips and nights staying in UK hotel/motel/guesthouse, 2013-23
Overseas visitors accounted for almost half of hotel nights in 2017
Figure 12: Volume of trips and nights staying in UK hotel/motel/guesthouse, by domestic and inbound visits, 2013-18
Performance metrics strong in 2017, flatter in 2018
Brexit challenges
Figure 13: UK hotels forecast, 2017-19
Figure 14: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2013-23
Figure 15: Total volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 2013-23
MARKET BACKGROUND
Economic growth sluggish but wages begin to rise
Figure 16: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year on year, January 2014-September 2018
Domestic tourism visits up 4% in first half of 2018
Figure 17: Domestic tourism market (GB) (all tourism), 2013-17
Staycation record
Figure 18: Domestic tourism, by trip volume and purpose, 2013-17
Inbound slump likely to be felt most in London after record growth
Figure 19: Total inbound tourism markets (all tourism), 2013-17
Figure 20: Inbound tourism, by trip volume and purpose, 2013-17
Emerging opportunities
Figure 21: Top 10 inbound source markets, by volume*, 2013-17
Figure 22: Top 10 inbound source markets, by value*, 2013-17
Currency matters
Figure 23: Spot exchange rate, Pound Sterling versus euro and US Dollar, June 2016-October 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Half of rooms in branded chains
Whitbread to focus on Premier Inn
Travelodge launches ‘budget chic’
IHG expanding luxury UK offer
Accor focusing on guest tech
Boutique lifestyle trend
Premier Inn has strongest brand
MARKET SHARE
Over 800,000 hotel rooms in 2018
Branded chain share is growing
Premier Inn
Travelodge
InterContinental Hotels Group
Accor
Figure 24: Top 10 hotels in the UK, by site numbers, October 2018
Best Western
Hilton
Marriott
Wyndham
BRAND RESEARCH
Brand map
Figure 25: Attitudes towards and usage of selected brands, August 2018
Key brand metrics
Figure 26: Key metrics for selected brands, August 2018
Brand attitudes: Trust is high for Premier Inn and Holiday Inn
Figure 27: Attitudes, by brand, August 2018
Brand personality: Hilton and Marriott seen as most exclusive
Figure 28: Brand personality – Macro image, August 2018
Travelodge seen as basic/functional
Figure 29: Brand personality – Micro image, August 2018
Brand analysis
Premier Inn
Figure 30: User profile of Premier Inn, August 2018
Travelodge
Figure 31: User profile of Travelodge, August 2018
Hilton
Figure 32: User profile of Hilton, August 2018
Marriott
Figure 33: User profile of Marriott, August 2018
Holiday Inn
Figure 34: User profile of Holiday Inn, August 2018
Best Western
Figure 35: User profile of Best Western, August 2018
Airbnb
Figure 36: User profile of Airbnb, August 2018
LAUNCH ACTIVITY AND INNOVATION
Super-budget
Budget-plus
Accor using WhatsApp
The smart room
Alexa for Hospitality
Personalised gestures
Themed hotels – beer
Themed hotels – wellness
Experiences
THE CONSUMER – WHAT YOU NEED TO KNOW
Hotel penetration slips but frequency rises
62% of guests stay in budget hotels
Third-party booking shift
Food is key to standing out
Experience valued more than functionality
Millennials grasp capsule concept
Consumers prefer hotels to Airbnb
HOTEL STAYS
Independent hotels dwindling but demand remains stable
Figure 37: Use of hotels in the past 12 months, August 2014-September 2018
Hotel usage still far outstrips rental property
Figure 38: Use of all tourist accommodation in the past 12 months, September 2018
Men are more frequent guests than women
Figure 39: Number of hotel stays in the past 12 months, September 2018
Frequency of stay has increased
Figure 40: Number of hotel stays in the past 12 months, September 2016 and September 2018
‘Mix-and-match’ hotel guests
Figure 41: Types of hotel stayed in during the past 12 months, September 2016-September 2018
Luxury/boutique segments have younger bias
Affluent singles offer upscale opportunity
Short leisure breaks account for 58% of trips
Figure 42: Purpose of last hotel stay, September 2018
HOTEL BOOKING
Hotels grow more reliant on third-party bookings
Figure 43: Booking methods used for last hotel stay, September 2015 and September 2018
Figure 44: Overall channels to market used for last hotel stay, September 2015 and September 2018
HOTELS – POTENTIAL ATTRACTIONS
Going beyond price
Foodie hotels
Figure 45: Factors that can attract hotel guests, September 2018
Getting personal
Figure 46: Attitudes towards selected hotel brands, August 2018
Country-house hotels in the city
Total wellbeing
The gastro-vegan hotel
Designer/themed/high-tech/social hotels offer niche opportunities
Airbnb-style experiences
The cat hotel
Bed, breakfast and service with a smile seen as core elements in a great hotel
HOTEL ATTITUDES – PRICE VERSUS EXPERIENCE
61% of adults think it’s worth paying extra for a better experience
Hotel experience especially important to women and empty nesters
Figure 47: Attitudes towards hotels, September 2018
Special-occasion luxury
Hybrid Millennials
Urban minimalism
HOTEL ATTITUDES – HOTELS VERSUS AIRBNB
Hotels retain traditional advantages over Airbnb
25% of adults see Airbnb as better value
Figure 48: Attitudes towards hotels versus Airbnb, September 2018
Millennials show strong recognition of Airbnb strengths
Figure 49: Attitudes towards hotels versus Airbnb, Millennials versus others, September 2018
Figure 50: Attitudes towards hotels versus Airbnb, hotel guests versus rental property guests, September 2018
Young urban professionals are most likely to prefer Airbnb
Figure 51: Hotels – CHAID – Tree output, September 2018
Engaging the Airbnb generation
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
CHAID methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 52: Total volume of trips staying in UK hotel/motel/guesthouse, 2018-23
Figure 53: Total volume of nights staying in UK hotel/motel/guesthouse, 2018-23
Forecast methodology