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Hotels - UK - October 2014

“Decreasing levels of interaction between hotels and guests could result in low levels of engagement, limited opportunities to build loyalty and also limited opportunities to drive incremental revenue. In the long-term, this coupled with a shift towards bookings through intermediaries could contribute towards a commodification of the hotels market, where decisions are based on metrics such as price and rating, with brand taking a back seat.”
– Harry Segal, Technology & Travel Analyst

Some questions answered in this report include:

  • What are the opportunities and challenges presented by the growth of mobile?
  • How can hotel operators react to a decreasing number of touch points?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Hotel operators will need to rely on inbound tourists for growth
                • Figure 1: Volume forecast of hotel/motel/guesthouse nights, 2014-19
              • Number of hotel visits forecast to increase 9% by 2019
                • Figure 2: Volume forecast of hotel/motel/guesthouse trips, 2014-19
              • Market factors
                • Google Limited Offers could disrupt the hotel booking market
                  • Skyscanner wins appeal to re-open the investigation into rate parity
                    • Legal reforms pave the way for Airbnb to expand in the UK
                      • Domestic market has contracted for three consecutive years
                        • Inbound tourism market is booming
                          • Market share
                            • Premier Inn and Travelodge continue to dominate the UK market
                              • Web traffic to Premier Inn and Travelodge has declined
                                • Over 15,000 rooms are in the pipeline for 2015
                                  • Budget hotels hold a 23% share of rooms; London accounts for 22%
                                    • The consumer
                                      • Chain hotels have been more successful at courting Millennials
                                        • Figure 3: Accommodation used, August 2014
                                      • Lodging services present a growing threat
                                        • Mobile growth could prove detrimental to independents and direct bookings
                                          • Figure 4: Device used for research, August 2014
                                        • Only half of guests book directly with the hotel
                                          • Mobile accounts for a fifth of online bookings
                                            • Figure 5: Device used for online booking, August 2014
                                          • Brands need to facilitate a cross-platform customer journey
                                            • A quarter of guests booked less than a week before check-in
                                              • Figure 6: Booking lead time, August 2014
                                            • Mobile provides an opportunity for brands to capitalise on impulsiveness
                                              • Price and location are most influential factors when choosing a hotel
                                                • Figure 7: Influencers on hotel choice, August 2014
                                              • Just 4% of guests are influenced by hotel loyalty schemes
                                                • Only half of guests visit a hotel’s website before booking
                                                  • Figure 8: Attitudes towards hotels, August 2014
                                                • Hotel’s need to integrate peer reviews into their websites
                                                  • Deal hunting has not contributed to shorter lead times
                                                    • What we think
                                                    • Issues and Insights

                                                        • What are the opportunities and challenges presented by the growth of mobile?
                                                          • The facts
                                                            • The implications
                                                              • How can hotel operators react to a decreasing number of touch points?
                                                                • The facts
                                                                  • The implications
                                                                  • Trend Application

                                                                      • Trend: Make it Mine
                                                                        • Trend: Influentials
                                                                          • Trend: Let's Make a Deal
                                                                          • Market Drivers

                                                                            • Key points
                                                                              • Google Limited Offers could disrupt the hotel booking market
                                                                                • Skyscanner wins appeal to re-open the investigation into rate parity
                                                                                  • Legal reforms pave the way for Airbnb to expand in the UK
                                                                                    • Domestic market has contracted for three consecutive years
                                                                                      • Figure 9: Domestic tourism market (GB) (all tourism), 2009-14
                                                                                    • Inbound tourism market is booming
                                                                                      • Figure 10: Inbound tourism market (UK) (all tourism), 2009-14
                                                                                    • A weak domestic performance is depressing the wider market
                                                                                      • Figure 11: Combined domestic and inbound tourism markets (all tourism), 2009-14
                                                                                  • Who's Innovating?

                                                                                    • Key points
                                                                                      • Marriott, Hilton and Starwood embrace mobile check-in and keyless entry
                                                                                        • Hilton strikes an industry first by letting guests select their own rooms
                                                                                          • BeMate bridges the gap between hotel operators and Airbnb
                                                                                            • Hotelrevu uses sentiment analysis to improve the accuracy of hotel ratings
                                                                                            • Market Size and Forecast

                                                                                              • Key points
                                                                                                • Hotel operators will need to rely on inbound tourists for growth
                                                                                                  • Figure 12: Total volume of trips and nights staying in UK hotels/motels/guesthouses, by domestic and inbound visits, 2009-14
                                                                                                • Strong growth in bed nights forecast to 2019
                                                                                                  • Figure 13: Forecast of hotel/motel/guesthouse trips and nights, 2009-19
                                                                                                • Fan charts
                                                                                                  • Figure 14: Volume forecast of hotel/motel/guesthouse trips, 2014-19
                                                                                                  • Figure 15: Volume forecast of hotel/motel/guesthouse nights, 2014-19
                                                                                                • Forecast methodology
                                                                                                • Segment Performance

                                                                                                  • Key points
                                                                                                    • London occupancy rates outperform the rest of the UK
                                                                                                      • Figure 16: Full-service hotel performance indicators, by region, 2013
                                                                                                    • Regional hotels enjoy a more even spread between revenue streams
                                                                                                      • Figure 17: Revenue breakdown, by region, 2013
                                                                                                    • London continued to perform well in the post-Olympic year
                                                                                                      • Figure 18: London full-service hotel performance indicators, 2012 and 2013
                                                                                                    • Regional England also improved across every metric
                                                                                                      • Figure 19: England (excluding London) full-service hotel performance indicators, 2012 and 2013
                                                                                                    • Edinburgh and Aberdeen fuel a strong performance from Scotland
                                                                                                      • Figure 20: Scotland full-service hotel performance indicators, 2012 and 2013
                                                                                                    • Wales enjoyed a boost from key sporting events and concerts in 2013
                                                                                                      • Figure 21: Wales full-service hotel performance indicators, 2012 and 2013
                                                                                                  • Market Share and Supply

                                                                                                    • Key points
                                                                                                      • Premier Inn and Travelodge continue to dominate the UK market
                                                                                                        • Figure 22: Top 20 UK hotel groups, by number of hotels in the UK, September 2014
                                                                                                      • Web traffic to Premier Inn and Travelodge has declined
                                                                                                        • Figure 23: Top ten UK hotel websites, by unique monthly visitors, 2012-14
                                                                                                      • Over 15,000 rooms are in the pipeline for 2015
                                                                                                        • Figure 24: UK hotel market supply, pipeline and closures, September 2014
                                                                                                      • Budget hotels account for 23% of UK hotel rooms…
                                                                                                        • Figure 25: UK room and hotel supply, by category, September 2014
                                                                                                      • …while London holds 22%
                                                                                                        • Figure 26: UK room and hotel supply, by region, September 2014
                                                                                                    • Companies and Products

                                                                                                        • Whitbread (Premier Inn)
                                                                                                          • Background
                                                                                                            • Financial performance
                                                                                                              • Figure 27: Financial performance of Whitbread PLC, 2013 and 2014
                                                                                                            • Travelodge
                                                                                                              • Background
                                                                                                                • Financial performance
                                                                                                                  • Figure 28: Financial performance of Travelodge Hotels Limited, 2012 and 2013
                                                                                                                • InterContinental Hotels Group (Holiday Inn)
                                                                                                                  • Background
                                                                                                                    • Figure 29: InterContinental Hotels Group’s European portfolio, June 2014
                                                                                                                  • Financial performance
                                                                                                                    • Figure 30: Financial performance of InterContinental Hotels Group, 2012 and 2013
                                                                                                                  • Accor (Ibis)
                                                                                                                    • Background
                                                                                                                      • Figure 31: Accor’s portfolio in Central, Nordic and East Europe (not including France), June 2014
                                                                                                                    • Financial performance
                                                                                                                      • Figure 32: Financial performance of Accor, 2012 and 2013
                                                                                                                    • Hilton Worldwide
                                                                                                                      • Background
                                                                                                                        • Financial performance
                                                                                                                          • Figure 33: Financial performance of Hilton Worldwide, 2012 and 2013
                                                                                                                        • Marriott International
                                                                                                                          • Background
                                                                                                                            • Financial performance
                                                                                                                              • Figure 34: Financial performance of Marriot International, 2012 and 2013
                                                                                                                            • Carlson Rezidor Hotel Group (Radisson)
                                                                                                                              • Background
                                                                                                                                • Financial performance
                                                                                                                                  • Figure 35: Financial performance of Rezidor, 2012 and 2013
                                                                                                                              • Brand Perceptions and Social Media

                                                                                                                                • Brand perceptions
                                                                                                                                  • Key brand metrics
                                                                                                                                    • Figure 36: Key brand metrics, June 2014
                                                                                                                                  • Brand map
                                                                                                                                      • Figure 37: Attitudes towards and usage of brands in the hotel sector, June 2014
                                                                                                                                    • Correspondence analysis
                                                                                                                                      • Brand attitudes
                                                                                                                                        • Figure 38: Attitudes, by hotel brand, June 2014
                                                                                                                                      • Brand personality
                                                                                                                                        • Figure 39: Hotel brand personality – macro image, June 2014
                                                                                                                                        • Figure 40: Hotel brand personality – micro image, June 2014
                                                                                                                                      • Brand usage
                                                                                                                                        • Figure 41: Hotel brand usage, June 2014
                                                                                                                                      • Brand experience
                                                                                                                                        • Figure 42: Hotel brand experience, June 2014
                                                                                                                                      • Social Media and Online Buzz
                                                                                                                                        • Social Media Metrics
                                                                                                                                          • Figure 43: Social media metrics of selected hotel brands, September 2014
                                                                                                                                        • Online mentions
                                                                                                                                          • Figure 44: Share of online conversation of selected hotel brands, 29 September 2013 – 28 September 2014
                                                                                                                                        • Topics of discussion
                                                                                                                                          • Figure 45: Topics of discussion around selected hotel brands, 29 September 2013 – 28 September 2014
                                                                                                                                        • Where discussion occurs
                                                                                                                                          • Figure 46: Share of brand conversation, by page type, 29 September 2013 – 28 September 2014
                                                                                                                                        • Analysis by brand
                                                                                                                                          • Hilton
                                                                                                                                            • Figure 47: Topic cloud around mentions of Hilton, 29 September 2013 – 28 September 2014
                                                                                                                                          • Marriott
                                                                                                                                            • Figure 48: Topic cloud around mentions of Marriott, 29 September 2013 – 28 September 2014
                                                                                                                                          • Premier Inn
                                                                                                                                            • Figure 49: Topic cloud around mentions of Premier Inn, 29 September 2013 – 28 September 2014
                                                                                                                                          • Holiday Inn
                                                                                                                                            • Figure 50: Topic cloud around mentions of Holiday Inn, 29 September 2013 – 28 September 2014
                                                                                                                                          • Travelodge
                                                                                                                                            • Figure 51: Topic cloud around mentions of Travelodge, 29 September 2013 – 28 September 2014
                                                                                                                                          • Radisson
                                                                                                                                            • Figure 52: Topic cloud around mentions of Radisson, 29 September 2013 – 28 September 2014
                                                                                                                                          • Ibis
                                                                                                                                            • Figure 53: Topic cloud around mentions of Ibis, 29 September 2013 – 28 September 2014
                                                                                                                                        • The Consumer – Accommodation Used

                                                                                                                                          • Key points
                                                                                                                                            • Chain hotels have been more successful at courting Millennials
                                                                                                                                              • Figure 54: Accommodation used, August 2014
                                                                                                                                            • Lodging services present a growing threat
                                                                                                                                            • The Consumer - Research and Booking Methods

                                                                                                                                              • Key points
                                                                                                                                                • Mobile growth could prove detrimental to independents and direct bookings
                                                                                                                                                  • Figure 55: Device used for research, August 2014
                                                                                                                                                • Only half of guests book directly with the hotel
                                                                                                                                                  • Figure 56: Booking method, August 2014
                                                                                                                                                • Mobile accounts for a fifth of online bookings
                                                                                                                                                  • Figure 57: Device used for online booking, August 2014
                                                                                                                                                • Brands need to facilitate a cross-platform customer journey
                                                                                                                                                • The Consumer – Booking Lead Time

                                                                                                                                                  • Key points
                                                                                                                                                    • A quarter of guests booked less than a week before check-in
                                                                                                                                                      • Figure 58: Booking lead time, August 2014
                                                                                                                                                    • Mobile provides an opportunity for brands to capitalise on impulsiveness
                                                                                                                                                    • The Consumer – Influencers on Hotel Choice

                                                                                                                                                      • Key points
                                                                                                                                                        • Price and location are most influential factors when choosing a hotel
                                                                                                                                                          • Figure 59: Influencers on hotel choice, August 2014
                                                                                                                                                        • Just 4% of guests are influenced by hotel loyalty schemes
                                                                                                                                                          • Peer reviews and star ratings are key drivers for independent hotels
                                                                                                                                                          • The Consumer – Attitudes towards Hotels

                                                                                                                                                            • Key points
                                                                                                                                                              • Only half of guests visit a hotel’s website before booking
                                                                                                                                                                • Figure 60: Attitudes towards hotels, August 2014
                                                                                                                                                              • Hotels need to integrate peer reviews into their websites
                                                                                                                                                                • Deal hunting has not contributed to shorter lead times
                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                    • Figure 61: Volume forecast of hotel/motel/guesthouse trips, 2014-19
                                                                                                                                                                    • Figure 62: Volume forecast of hotel/motel/guesthouse nights, 2014-19

                                                                                                                                                                Companies Covered

                                                                                                                                                                • AC Hotels
                                                                                                                                                                • Accor
                                                                                                                                                                • Blackstone Group (The)
                                                                                                                                                                • Bloomberg L.P.
                                                                                                                                                                • Brewers Fayre
                                                                                                                                                                • Compass Group Plc
                                                                                                                                                                • Costa
                                                                                                                                                                • DoubleTree Hotels
                                                                                                                                                                • Goldman Sachs Group, Inc., The
                                                                                                                                                                • Hilton Hotels Corporation
                                                                                                                                                                • InterContinental Hotels Group PLC
                                                                                                                                                                • Marriott International, Inc.
                                                                                                                                                                • Novotel
                                                                                                                                                                • Radisson Hotels & Resorts
                                                                                                                                                                • Rezidor Hotel Group
                                                                                                                                                                • The Ritz-Carlton Hotel Company, L.L.C.
                                                                                                                                                                • Travel Inn
                                                                                                                                                                • Travelodge Hotels Inc.
                                                                                                                                                                • TripAdvisor LLC
                                                                                                                                                                • Whitbread PLC

                                                                                                                                                                Hotels - UK - October 2014

                                                                                                                                                                £1,995.00 (Excl.Tax)