Our Findings From The Independent Hotel Show 2023

Challenges the British Tourism Market is facing

During our time exhibiting at the Independent Hotel show, several insights and future projections were highlighted across the various industry discussions. One important aspect discussed was the cost of living in the UK. It was pointed out that the high cost of living in the country could deter some visitors. Another key issue raised was visitor documentation, particularly visa issues with international markets. The process and requirements for obtaining visas can sometimes be cumbersome and time-consuming, potentially discouraging potential visitors. Streamlining the visa application process and improving accessibility could greatly benefit the industry.

Political uncertainty was also discussed as a factor impacting the hospitality industry. Uncertainty surrounding Brexit and other political events can create a sense of hesitation among potential visitors, causing them to postpone or reconsider their travel plans. This combined with the cost of living concerns can cause guests to cancel plans, or reconsider their purchases.

The event also touched upon the regional spread of tourism in the UK. In 2019, London received over £15.7 billion in inbound spending, while the rest of England only received £9 billion. This highlights the need for more efforts to promote and develop tourism in other regions of the country to balance out the economic benefits. Staff shortages emerged as another significant concern within the industry. Many hoteliers expressed their struggles in finding and retaining skilled staff members. This issue continues to be a concern and affects the quality of service provided and the overall guest experience. Solutions such as improving training programmes and offering competitive wages and benefits were suggested to combat this.

Lastly, urgency was identified as a key area to focus on. Many potential visitors see Britain as a destination to visit someday, rather than today. Creating a sense of immediacy and highlighting the unique experiences available could encourage more immediate travel plans.

Overall, these insights and projections shed light on the challenges and opportunities faced by the independent hotel industry in the UK. By addressing these issues and taking advantage of emerging trends, hoteliers can navigate the changing landscape and position themselves for future success.

Sustainability

Our visit to The Independent Hotel Show provided a unique platform for industry experts to discuss the current challenges and future prospects facing the British tourism market. Among the key takeaways from the event, one significant trend that emerged was the growing demand for sustainability in travel.

With 47% of consumers seeking sustainable travel information from lodging providers, it is evident that there is a strong desire among travellers to make eco-friendly choices. In fact, 80% of travellers in England consider sustainability to be important to them. This presents a unique opportunity for independent hoteliers to differentiate themselves and cater to this increasing demand. By embracing sustainable practices and offering eco-friendly options, hotels can not only attract more guests but also contribute to the overall conservation of the environment. A win-win for guests and hoteliers.

Furthermore, according to Statista, 37% of travellers actively consider using eco-friendly hotels. This indicates a growing market segment that independent hoteliers can tap into by showcasing their sustainable initiatives. From using renewable energy sources to implementing recycling programmes, there are various ways hotels can demonstrate their commitment to sustainability.

Quality

Another key takeaway we discovered from the show was the importance of official star ratings in aiding accommodation choice. According to Strategic Research and Insight, 86% of consumers believe that star ratings play a crucial role in their decision-making process, particularly for international visitors. This highlights the significance of maintaining high standards and striving for excellence in service and facilities. In addition to star ratings, customer reviews were also deemed important, with younger consumers placing greater reliance on these reviews.

Cost of living perception

Another significant observation was the easing perception of the cost of living crisis. According to VisitEngland's Domestic Sentiment Tracker, there has been a notable decrease in the percentage of people who believe that the worst is yet to come. As of August 2022, 76% of individuals believed the worst of the cost of living crisis is still to come. With 13% believing things are going to stay the same and 12% believing the worst has passed.

As of August 2023, 50% believed the worst is still to come, 30% believed things are going to stay the same and 20% believed the worst has passed. This suggests that there is a growing optimism amongst the public, which could have a positive impact on the tourism market.

Occupancy of England hotels

The show highlighted a positive movement in occupancy levels for England hotels. After the setbacks caused by the pandemic, occupancy levels are now returning to pre-pandemic levels, with 2023 seeing similar levels to those in 2019. This is great news for the industry and demonstrates the resilience and recovery of the sector.

The show also emphasised the importance of sustainability in the hotel industry. With a growing demand for eco-friendly options, independent hoteliers have a unique opportunity to attract more guests by embracing sustainable practices. From renewable energy sources to recycling programmes, there are various ways hotels can demonstrate their commitment to sustainability.

Additionally, the show underscored the significance of quality and customer satisfaction. Official star ratings and customer reviews play a crucial role in influencing accommodation choices, particularly for international visitors. Independent hoteliers must strive for excellence in service and facilities to meet customer expectations and ensure a positive guest experience.

Inbound visitors vs GB Domestic visitors

Another key takeaway our team found was the need for hotels to focus on attracting more bookings from inbound visitors, as they tend to generate higher revenue. The data for Q1 2023 showed that inbound visitors stay an average of .2 nights per trip and spend an average of £731, compared to domestic visitors who stay an average of 2.9 nights per trip and spend an average of £266. This trend was consistent throughout 2022 as well. These numbers highlight the importance of targeting and catering to the needs of international travellers to maximise profits for independent hotels.

Perception of Britain in international markets

Short-haul markets

France and Ireland share commonalities as the two ‘closest’ neighbours where speaking to ease / convenience and fringe season travel aligns with existing perceptual strengths.

In Southern Europe, Britain stands out as a mix of old and new; a place of cultural diversity, uniqueness and must-visit sights and places (similar to themselves).

In Norway and Sweden, the idea of Britain as inclusive and easy access to vibrant towns and cities is most dominant.

Other European countries see Britain as offering vibrant towns and cities, diversity, culture, famous sights and the opportunity for easy exploration and discovery - similar to long-haul markets.

Long-haul markets

Long-haul markets or ‘rest of the world’ see Britain more consistently as offering heritage and history, the ability to roam and explore a broad mix of ‘must-do’ experiences of new and old.

Saudi and China see Britain as a place for ‘premium’ products, services and experiences.

India perceives Britain to offer a huge variety of food and drink.

Japanese tourists perceive Britain to offer a wide variety of contemporary arts and culture.

Brazil and Israel see Britain as a great place for social media ‘snappability’ and sharing.

Demand and rates

One positive development highlighted is the demand for hotel accommodations returning to pre-pandemic levels. Occupancy levels are steadily improving, with 2023 projected to reach similar levels to 2019. This is great news for the industry and demonstrates its resilience and recovery.

Another noteworthy trend was the return of Chinese international travellers. After a slow period, it is expected that Chinese travel to the UK will reach previous levels by 2025. However, it is important to note that only 6% of the Chinese population currently holds passports for travel, indicating a significant growth potential in the future.

The American market has also played a significant role in the recovery of the British tourism market. The favourable exchange rate between the US dollar and the British pound has made travel to the UK more attractive for American tourists. However, the upcoming US election year may have an impact on travel patterns. Interestingly, the recovery in Eastern European markets has been better than in Western European markets.

Additionally, the show highlighted the different recovery patterns for economy hotels and luxury hotels. While economy hotels have experienced growth in occupancy, luxury hotels have seen an increase in rates but not occupancy. This indicates that there is still room for improvement in attracting high-end travellers to luxury hotels.

Business on the books

After the challenging times that the British tourism market has faced, there is some positive news on the horizon. According to the findings from the Independent Hotel Show, there are promising signs for independent hotels when it comes to business on the books.

Additionally, average daily rates (ADR) have also improved, even when inflation is factored into the room rate for independent hotels. This is encouraging news, as it shows that hoteliers are finding ways to maintain profitability in the face of rising costs. Another interesting trend that emerged is the role that sporting events play in driving hotel bookings, particularly in cities with successful teams. Whether it's football, rugby, or other sports, these events attract fans from all over the country and even internationally, leading to increased occupancy levels in hotels.

However, it's important to note that the festive period tends to be a quieter time for the industry. Many people are focused on spending time with family and friends during this time, rather than travelling. Hoteliers should be prepared for this seasonal fluctuation in demand but also potentially expect late bookings across the period with possible changes to consumer habits.

One factor that has had a significant impact on hotel bookings is the Taylor Swift tour. The popular singer's concerts have resulted in a surge in hotel bookings, with fans travelling from far and wide to attend her shows. This highlights the influence that cultural events can have on the tourism industry, and possibly an avenue to explore in marketing for these events.

While Western European capitals have seen a strong recovery in occupancy levels this year, Central and Eastern European capitals have struggled to regain pre-pandemic levels. This discrepancy suggests that there are still challenges to overcome in certain markets.

Overall, the business on the books for independent hotels is looking promising. Occupancy levels in key cities are starting to reach over 70%, with an average of 77% across the board. Additionally, independent hotels have seen a greater improvement in occupancy levels compared to 2019 than brand hotels in selected UK markets. These positive signs indicate that the industry is on the path to recovery and that independent hotels are well-positioned to capitalise on the growing travel demand.

Forecast

Another positive development was the continued recovery of occupancy levels, with 2024 expected to exceed the occupancy levels of 2019 in London. This is a significant milestone and a testament to the resilience and recovery of the sector. In regional hotels, there is a marginal increase in occupancy levels projected for 2024, bringing them to similar levels as 2023. Whilst the rates are also growing in regional hotels, the rate of growth is slower compared to previous years.

Future growth plans for major cities in the UK were also discussed. Cardiff, Edinburgh, and Glasgow are all planning significant growth in terms of the number of rooms available. This indicates a positive outlook for these cities and presents new opportunities for independent hoteliers to cater to the increasing demand. Another noteworthy trend was the importance of sustainability in the hotel industry. With an increasing number of travellers seeking eco-friendly options, independent hoteliers have a unique opportunity to attract more guests by embracing sustainable practices. From implementing recycling programmes to using renewable energy sources, there are various ways hotels can demonstrate their commitment to sustainability and hotels should look to do so in order to fall in line with the expectations of guests.