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Hotels - UK - November 2016

OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
Climate of uncertainty
Figure 1: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2011-21
Market of two halves
Figure 2: Volume of nights staying in UK hotels by domestic and inbound visitors, 2011-16
Made for China
Figure 3: Inbound tourism (all purposes), top ten source markets by value, 2015
Weak Pound likely to bolster demand for UK trips
Figure 4: Sterling annual average exchange rate against euro and US$, 2011-15 and spot rate as at 31 October 2016
Market becoming more branded
Figure 5: Top 10 hotels in the UK, by site numbers, October 2016
Boutique/lifestyle leads innovation
Budget dominates but half of guests still use mid-market hotels
Figure 6: Types of hotel stayed in over the past 12 months, September 2016
Hotels lose share of booking
Guests demand flexible approach
Hotel Millennial
Figure 7: Hotel preferences (factors rated as either very important or somewhat important), September 2016
What we think
ISSUES AND INSIGHTS
How hotels can respond to competition from Airbnb
The facts
The implications
Older guests are under-represented in luxury segment
The facts
The implications
Hotels can be either a laboratory for new technology or an oasis of human contact in a world of automation
The facts
The implications
Well-being and the Hygge Hotel
The facts
The implications
Offering incentives for direct booking
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Flattish growth in 2016 following rise in 2015
Short leisure breaks robust
But inbound rise has provided biggest boost
Terrorism fears are a problem but weak Pound is a plus
Inflationary pressures could dampen willingness to spend
Annual hotel trip growth of 2% expected
MARKET SIZE, SEGMENT PERFORMANCE AND FORECAST
Inbound tourism has been key growth driver for hotels
Figure 8: Total volume of trips and nights staying in UK hotels/motels/guesthouses, 2011-21
Figure 9: Volume of trips and nights staying in UK hotels/motels/guesthouses, by domestic and inbound visits, 2011-16
Brexit and beyond
Consumers set to become even more budget-conscious
Business travel looks challenging
Forecast
Figure 10: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 20011-21
Figure 11: Volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 20011-21
The impact of the EU referendum vote
Figure 12: Alternative market scenarios for the post-Brexit Hotels market, by volume of trips, 2016-21
Figure 13: Detailed Post-Brexit scenarios for the post-Brexit Hotels market, by volume of trips, 2016-21
Staycation mark #2 could boost hotel sector
MARKET BACKGROUND
The macro-economic context
Domestic tourism performance up and down
Figure 14: Domestic tourism market (UK) (all tourism), 2011-16
Robust short break segment
Figure 15: Domestic tourism by trip volume and purpose, 2011-15
Inbound going from strength to strength
Figure 16: Total inbound tourism markets (all tourism), 2011-16
But concerns over terrorism are a threat
Figure 17: Inbound tourism by trip volume and purpose, 2011-15
Chinese visitor growth an opportunity for hotels
Figure 18: Inbound tourism (all purposes), top ten source markets by value, 2015
Cost of a UK hotel break drops 13%
Figure 19: Sterling annual average exchange rate against euro and US$, 2011-15 and spot rate as at 31 October 2016
Figure 20: City break holiday living costs, 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW
Budget sector drives majority of supply growth
Supply surges after post-Olympic lull
Premier Inn has most positive brand perceptions
Proliferation of boutique brands
New ways to wellness
New hotel themes
Room service by AI
MARKET SHARE
Dramatic growth of branded budget sector
Figure 21: Estimated number of UK hotels and rooms by type of hotel, 2015
Figure 22: Estimated growth in number of UK hotel rooms by type of hotel, 2007-15
Rapid growth has continued in 2016
Risk of over-supply
Market leaders
Figure 23: Top 20 hotels in the UK, by site numbers, October 2016
LAUNCH ACTIVITY AND INNOVATION
Boutique boom
Down with the kids
Themed hotels: kids TV, gaming and gin
Cultural content and events
Convenience shopping
Wellness
Humans
The purple pound
HOTEL BRAND RESEARCH
Brand map
Figure 24: Attitudes towards and usage of selected brands, September 2016
Key brand metrics
Figure 25: Key metrics for selected brands, September 2016
Brand attitudes: Hilton scores highest on quality
Figure 26: Attitudes, by brand, September 2016
Brand personality: Best Western suffers jaded image
Figure 27: Brand personality – macro image, September 2016
Premier Inn – honest and reliable
Figure 28: Brand personality – micro image, September 2016
Brand analysis
Premier Inn seen as best value brand
Figure 29: User profile of Premier Inn, September 2016
Brand analysis
Marriott needs to convince the uninitiated
Figure 30: User profile of Marriott, September 2016
Brand analysis
Hilton exclusive but worth it
Figure 31: User profile of Hilton, September 2016
Brand analysis
Holiday Inn seen as friendlier than upscale brands
Figure 32: User profile of Holiday Inn, September 2016
Brand analysis
Mercure less well known but high “excellence” rating
Figure 33: User profile of Mercure, September 2016
Brand analysis
Best Western tackling problems with major re-brand
Figure 34: User profile of Best Western, September 2016
Brand analysis
‘Basic’ Travelodge struggles to shrug off past image
Figure 35: User profile of Travelodge, September 2016
Brand analysis
THE CONSUMER – WHAT YOU NEED TO KNOW
Independent opportunity
Over-45s the most drawn to mid-market hotels
Third party booking grows
Older guests most likely to post reviews
High-tech versus low-tech
Consumers expect greater flexibility
Local knowledge
Networking hotels
OVERALL ACCOMMODATION USE
Opportunity for independents in heavily branded industry
Figure 36: Types of accommodation stayed in over the past 12 months, September 2016
P2P threat
HOTEL USE – TYPE, FREQUENCY AND PURPOSE
Ageing population offers opportunities for mid-market hotels
Figure 37: Types of hotel stayed in over the past 12 months, September 2016
Figure 38: Types of hotel stayed in over the past 12 months, by age group, September 2016
But older guests less likely to choose luxury
Mix and match hotel guests
One in five is a ‘Frequent Guest’
Figure 39: Number of hotel stays over the past 12 months, September 2016
Figure 40: demographic profile of frequent hotel guests (4+ stays)
Shorter holiday patterns good for hotels
Figure 41: Purpose of last hotel stay, September 2016
Business and leisure combinations
HOTEL BOOKING PROCESS
Downward drift of direct booking
Figure 42: Method of booking last hotel stay, September 2016
The battle for the customer
Who are the influencers?
Figure 43: Use of hotel customer review sites, September 2016
Figure 44: Use of hotel customer review sites, by type of hotel stayed in, September 2016
Interest in more personalised reviews
Figure 45: Opinions on customer review sites, September 2016
ATTITUDES, PREFERENCES & OPPORTUNITIES
Hotel tech-lovers vs Tech-escapers
Figure 46: Attitudes towards hotel technology, September 2016
Most guests are highly budget-minded
Greater flexibility demanded
Figure 47: Hotel preferences, September 2016
Figure 48: Hotel preferences (factors rated as either very important or somewhat important), September 2016
Insider dealing
Hotel Hygge
Millennial matters
APPENDIX
Definition
Abbreviations

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