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Hotels - UK - November 2015

“The hotel market is less commoditised than the airline industry which means that hoteliers have an easier time coaxing guests to buy into a more personalised experience. The key to this personalisation will be the acquisition of customer data; however, most guests are extremely wary of their online security, especially when it comes to sharing location and social media data. As a result, measures will need to be taken to reassure guests that their information will not be used in an intrusive way.”

– Fergal McGivney, Travel and Technology Analyst

This report looks at the following issues:

  • How open are consumers to Airbnb-style accommodation?
  • How to drive more direct bookings?

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Table of contents

  1. Overview

    • What you need to know
      • Scope of the report
      • Executive Summary

          • The market
            • Domestic market growing after a poor 2014
              • Figure 1: Forecast of total inbound and domestic hotel/motel/guesthouse trips, 2015-20
              • Figure 2: Forecast of total inbound and domestic hotel/motel/guesthouse nights, 2015-20
            • The consumer
              • Airbnb growing but penetration still very much in its infancy
                • Figure 3: Accommodation types used to stay in the UK, September 2015
              • Gamify the booking process to engage the consumer on Brand.com
                • Figure 4: How last hotel was booked, September 2015
              • Current holiday data can facilitate an ‘always-on’ concierge service via mobile
                • Figure 5: Attitudes towards sharing data with hotels, September 2015
              • Strong demand among guests for wireless charging
                • Figure 6: Most popular technologies/services in UK hotels, September 2015
              • Holidaymakers unfazed by negative press for hotel review sites
                • Figure 7: Attitudes towards hotels, September 2015
              • What we think
              • Issues and Insights

                • How open are consumers to Airbnb-style accommodation?
                  • The facts
                    • The implications
                      • How to drive more direct bookings?
                        • The facts
                          • The implications
                          • The Market – What You Need To Know

                            • Domestic market growing after a poor 2014
                              • Inbound trips continue to grow
                                • Total trip volume for hotels/motels/guesthouses expected to grow
                                  • Strong Pound may limit spending and heighten price sensitivity
                                    • London in seventh place on the Post Office City Cost Barometer
                                    • Market Size and Forecast

                                      • Steady growth predicted over the next five years
                                        • Figure 8: UK hotel market*, by trips and nights, 2010-20
                                      • Domestic hotel market growing after a poor 2014
                                        • Inbound trips remain stable
                                          • Figure 9: Volume of trips and nights staying in UK hotels/motels/guesthouses, by domestic and inbound visits, 2010-15
                                        • Forecast
                                          • Figure 10: Forecast of total inbound and domestic hotel/motel/guesthouse trips, 2015-20
                                          • Figure 11: Forecast of total inbound and domestic hotel/motel/guesthouse nights, 2015-20
                                      • Segment Performance

                                        • London hotels dominate KPIs across the UK
                                            • Figure 12: Full-service hotel performance indicators, by region, 2014
                                          • Scope to improve food and beverage offerings in London hotels
                                            • Figure 13: Revenue breakdown, by region, 2014
                                          • 2014 sees improved growth for London across all metrics
                                            • Figure 14: London full-service hotel performance indicators, 2013 and 2014
                                          • Regional England shows strong performance in total revenue per available room
                                            • Figure 15: England (excluding London) full-service hotel performance indicators, 2013 and 2014
                                          • Scotland sees strongest growth in occupancy rate and average daily rate
                                            • Figure 16: Scotland full-service hotel performance indicators, 2013 and 2014
                                          • Wales sees strongest growth in TRevPAR
                                            • Figure 17: Wales full-service hotel performance indicators, 2013 and 2014
                                        • Market Drivers

                                          • Total domestic tourism market set to surprise with growth in 2015
                                            • Figure 18: Domestic tourism market (UK) (all tourism), 2010-15
                                          • Total inbound market remains strong
                                            • Figure 19: Total inbound tourism markets (all tourism), 2010-15
                                            • Figure 20: Combined domestic and inbound tourism markets (all tourism), 2010-15
                                          • Consumer finances improving, but may encourage domestic travellers to venture abroad
                                            • Strong Pound may limit spending and heighten price sensitivity
                                              • Figure 21: Post Office City Costs Barometer, 2015
                                            • Hotel and OTA partnerships; regulators keeping a close eye
                                            • Key Players – What You Need To Know

                                              • Budget brands dominate
                                                • Premier Inn is the UK’s most popular hotel
                                                  • The Hilton brand is seen as the most exclusive hotel
                                                    • Marriott ranks just behind Hilton for perceived levels of consistent high quality
                                                      • Holiday Inn enjoys high awareness but has relatively low usage compared to Premier Inn and Travelodge
                                                        • Radisson brand awareness is the lowest of the hotels listed
                                                          • Travelodge has high awareness and usage among UK consumers
                                                            • Best Western must appeal to younger consumers
                                                            • Market Share

                                                              • Budget brands dominate
                                                                • Figure 22: Top hotels in the UK, by room and site numbers, ranked by rooms, 2014
                                                            • Launch Activity and Innovation

                                                              • Virgin streamlines the hotel experience with its new app
                                                                • TripAdvisor’s Instant Booking tool takes off
                                                                  • Cliq Orange develops image and video content analysis for hotels
                                                                    • Socialising in hotels facilitated via mobile apps
                                                                      • Marriott trials Virtual Reality headsets
                                                                      • Hotel Brand Research

                                                                          • Brand map
                                                                            • Figure 23: Attitudes towards and usage of selected hotel brands, August 2015
                                                                          • Key brand metrics
                                                                            • Figure 24: Key metrics for selected hotel brands, August 2015
                                                                          • Brand attitudes: Travelodge and Premier Inn seen to offer good value, Radisson, Marriott and Hilton win on quality
                                                                            • Figure 25: Attitudes, by hotel brand, August 2015
                                                                          • Brand personality: Travelodge and Best Western suffering due to boring, tired, and unappealing perceptions
                                                                            • Figure 26: Brand personality – Macro image, August 2015
                                                                          • Marriott considered stylish and trendy, Premier Inn is seen as friendly, honest and welcoming
                                                                            • Figure 27: Brand personality – Micro image, August 2015
                                                                          • Brand analysis
                                                                            • The Premier Inn brand comes out on top
                                                                              • Figure 28: User profile of Premier Inn, August 2015
                                                                            • Hilton is the highest rated full-service offering
                                                                              • Figure 29: User profile of Hilton, August 2015
                                                                            • Marriott is considered to be slightly more functional than its high-end rivals
                                                                              • Figure 30: User profile of Marriott, August 2015
                                                                            • Holiday Inn has high awareness levels but lower usage rates compared to its rivals
                                                                              • Figure 31: User profile of Holiday Inn, August 2015
                                                                            • Radisson users rate the experience highly, but the brand suffers from low awareness
                                                                              • Figure 32: User profile of Radisson, August 2015
                                                                            • Travelodge is functional but perceptions indicate it is in need of a boost
                                                                              • Figure 33: User profile of Travelodge, August 2015
                                                                            • Best Western needs to engage younger consumers who see it as tired and boring
                                                                              • Figure 34: User profile of Best Western, August 2015
                                                                          • The Consumer – What You Need To Know

                                                                            • Airbnb growing but penetration still very much in its infancy
                                                                              • Third party booking channels catching up with direct bookings
                                                                                • Hotels should use gamification to encourage direct bookings
                                                                                  • Current holiday data can facilitate an ‘always-on’ concierge service via mobile
                                                                                    • Holidaymakers unfazed by negative press for hotel review sites Over the past year, there have been concerns over transparency surrounding hotel reviews on popular travel websites such as TripAdvisor and Yelp. In December 2014, TripAdvisor was fined €500,000 by Italy’s competition authority over reviews it deemed to be misleading.
                                                                                      • Young affluent men most likely to use Airbnb-style services
                                                                                        • A trend for reduced spending among business travellers emerging?
                                                                                          • Business travellers can be key influentials for concierge style apps
                                                                                          • Accommodation Type and Purpose of Visit

                                                                                            • Airbnb growing but penetration still very much in its infancy
                                                                                                • Figure 35: Accommodation types used to stay in the UK, August 2014 to September 2015
                                                                                              • A trend for reduced spending among business travellers emerging?
                                                                                                  • Figure 36: Purpose of stay in UK accommodation, September 2015
                                                                                              • Attitudes towards Spending on Hotels

                                                                                                • Under-45s more open to spending despite being avid price comparers
                                                                                                  • Hotels could engage guests by facilitating external activities
                                                                                                    • Figure 37: Attitudes towards spending in hotels, September 2015
                                                                                                • Hotel Booking Process

                                                                                                    • Establishing a relationship to secure direct bookings
                                                                                                      • Consumers able to book via Google Maps
                                                                                                        • The billboard effect: benefits of OTAs may be on the wane
                                                                                                          • Figure 38: How last hotel was booked, September 2015
                                                                                                      • Attitudes towards Sharing Data with Hotels

                                                                                                          • Guests open to sharing basic personal data and current holiday data
                                                                                                            • Current holiday data can facilitate an ‘always-on’ concierge service via mobile
                                                                                                              • A three-part approach; reach out at different stages of a guest’s stay
                                                                                                                • Guests need to be encouraged to share their location data
                                                                                                                    • Figure 39: Attitudes towards sharing data with hotels, September 2015
                                                                                                                • Technology in Hotels

                                                                                                                  • Older generations favour more traditional properties
                                                                                                                    • Figure 40: Attitudes towards style of hotel, September 2015
                                                                                                                  • Traditional hotels can modernise to attract a broader demographic
                                                                                                                    • Strong demand among guests for wireless charging
                                                                                                                      • Business travellers can be key influencers for concierge-style apps
                                                                                                                        • Figure 41: Technologies/services hotel visitors would find most useful in UK hotels, September 2015
                                                                                                                    • Attitudes towards Hotels

                                                                                                                      • Holidaymakers unfazed by negative press for hotel review sites
                                                                                                                        • The guest as PR mouthpiece
                                                                                                                          • Airbnb has ambitious growth predictions but most consumers still prefer traditional hotels
                                                                                                                            • Young parents open to non-traditional accommodation and day stays
                                                                                                                              • Figure 42: Attitudes towards hotels, September 2015
                                                                                                                            • Methodology
                                                                                                                              • Young parents open to non-traditional accommodation and day stays
                                                                                                                                • Figure 43: Target groups based on attitudes towards hotels in the UK – CHAID – Tree output, August 2015
                                                                                                                                • Figure 44: Target groups based on attitudes towards hotels in the UK – CHAID – Table output, August 2015
                                                                                                                            • Appendix – Data Sources, Abbreviations, and Supporting Information

                                                                                                                                • Abbreviations
                                                                                                                                  • Definitions
                                                                                                                                    • Forecast methodology
                                                                                                                                        • Figure 45: Best- and worst-case forecast for the number of hotel trips in the UK market, 2015-20
                                                                                                                                        • Figure 46: Best- and worst-case forecast for the number of hotel nights in the UK market, 2015-20
                                                                                                                                      • Brand research
                                                                                                                                        • Brand map

                                                                                                                                        Companies Covered

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                                                                                                                                        Hotels - UK - November 2015

                                                                                                                                        £1,995.00 (Excl.Tax)