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UK Hotels market report

"The growing likelihood of rising inflation in the coming months could impact on how much UK consumers are willing to spend on their short break habit. There may well be an accelerated 'flight to value' which is likely to increase still further growing the market share of the rapidly expanding budget hotel sector (including so-called super-budget offerings) as well as increasing the attractiveness of cheaper alternatives such as Airbnb."

- John Worthington, Senior Analyst

This report will cover the following areas:

  • How hotels can respond to competition from Airbnb
  • Older guests are under-represented in luxury segment
  • Hotels can be either a laboratory for new technology or an oasis of human contact in a world of automation
  • Well-being and the Hygge Hotel
  • Offering incentives for direct booking

For many consumers, staying in a hotel is no longer a once in a blue moon, special occasion indulgence, but - like eating out - has now become a far more affordable, regular and casual experience. The hotel market is benefiting, in particular, from the regular short break habit adopted by UK consumers as a way of life. While the budget chain sector is increasingly dominant that also creates opportunities for other tiers and branded concepts as well as unique, independent establishments. The threat from 'industry disruptors' like Airbnb is growing but this should be welcomed by hoteliers as an incentive to raise their game, competing not only on price but on the services and experiences that make a hotel stay different. The economic uncertainty of Brexit and threat of terrorism are problems ahead, and the outlook for business travel is particularly challenging, but the Pound's weakness is a key plus-factor for UK domestic and inbound travel and should benefit hotels.

The market section of this Report examines hotels, motels and guesthouses in the UK used by both domestic and foreign tourists for any leisure, business and visiting friends and relatives (VFR) purposes. The consumer section examines a range of issues related to the UK consumer when staying in commercial accommodation including:

  • Accommodation types stayed in over the last year
  • Types of hotel stayed in, purpose and frequency of stay
  • The hotel booking process
  • Usage of and attitudes towards online customer reviews
  • Attitudes towards technology in hotels
  • Preferences for types and styles of hotel

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Table of contents

  1. Overview

    • What you need to know
      • Scope of this Report
      • Executive Summary

          • The market
            • Positive outlook for the UK hotel market going forward
                • Figure 1: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2012-22
                • Figure 2: Volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 2012-22
              • Inbound volume to boost UK hotel market
                • Figure 3: Top 10 inbound markets, by volume*, 2016
              • The consumer
                • Proportion of UK consumers staying in hotels remains steady but Airbnb use is growing
                    • Figure 4: Types of accommodation used, 2014 and 2017
                  • Two thirds of hotel guests have stayed in a budget hotel
                    • Figure 5: Types of hotels used, 2016 and 2017
                  • Preferences for hotels versus Airbnb; most consumers still prefer hotels
                      • Figure 6: Types of accommodation used, August 2017
                    • The bleisure trend presents opportunities
                      • Good news for direct bookings; Expedia drops its price match guarantee
                        • Figure 7: Online research sources, August 2017
                      • Data is becoming increasingly important for hotels
                        • Figure 8: Data sharing with hotels, August 2017
                      • In the burgeoning automation era, human interaction still matters
                          • Figure 9: Attitudes towards hotels I, August 2017
                        • What we think
                        • Issues and Insights

                          • How data is becoming increasingly important for hotels
                            • The facts
                              • The implications
                                • Hotels versus Airbnb; which do consumers prefer?
                                  • The facts
                                    • The implications
                                      • Opportunities lie in the short break market and the bleisure trend
                                        • The facts
                                          • The implications
                                            • Good news for direct bookings; Expedia drops its price match guarantee
                                              • The facts
                                                • The implications
                                                  • Benefits of promoting packages to domestic tourists
                                                    • The facts
                                                      • The implications
                                                      • The Market – What You Need to Know

                                                        • Promising outlook for the UK hotel market
                                                          • Interest rate rises could help staycations
                                                            • Holidaymakers may cut back on overseas short breaks for staycations
                                                              • Inbound volume to boost UK hotel market
                                                                • Top five inbound nations visiting the UK
                                                                  • Increase in inbound especially good for the luxury sector
                                                                  • Market Size and Forecast

                                                                    • Positive outlook for the UK hotel market going forward
                                                                        • Figure 10: Total volume of trips and nights staying in UK hotel/motel/guesthouse, 2012-22
                                                                        • Figure 11: Volume of trips and nights staying in UK hotel/motel/guesthouse, by domestic and inbound visits, 2012-17
                                                                        • Figure 12: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2012-22
                                                                        • Figure 13: Volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 2012-22
                                                                      • Forecast methodology
                                                                      • Market Segmentation

                                                                        • Inbound volume to boost UK hotel market
                                                                          • Figure 14: Top 10 markets, by volume*, 2016
                                                                          • Figure 15: Top 10 markets, by value*, 2016
                                                                        • Data from Expedia reveals high-spending nationalities
                                                                          • Hotel KPIs paint a promising picture looking towards 2018
                                                                              • Figure 16: UK hotels forecast, 2017 and 2018
                                                                          • Brand Research

                                                                              • Brand map
                                                                                • Figure 17: Attitudes towards and usage of selected brands, September 2017
                                                                              • Key brand metrics
                                                                                • Figure 18: Key metrics for selected brands, September 2017
                                                                              • Brand attitudes
                                                                                • Figure 19: Attitudes, by brand, September 2017
                                                                              • Brand personality
                                                                                • Figure 20: Brand personality – Macro image, September 2017
                                                                                • Figure 21: Brand personality – Micro image, September 2017
                                                                              • Brand analysis
                                                                                • Premier Inn remains the UK’s favourite hotel brand
                                                                                  • Figure 22: User profile of Premier Inn, September 2017
                                                                                • Hilton is the luxury option; could staycationers trade up?
                                                                                  • Figure 23: User profile of Hilton, September 2017
                                                                                • Marriott could benefit from boosting awareness
                                                                                  • Figure 24: User profile of Marriott, September 2017
                                                                                • Holiday Inn’s reputation will have taken a hit after malware infection
                                                                                  • Figure 25: User profile of Holiday Inn, September 2017
                                                                                • Travelodge looks towards premium economy services to boost reputation
                                                                                  • Figure 26: User profile of Travelodge, September 2017
                                                                                • Best Western’s independent focus may cause perceptions to vary
                                                                                  • Figure 27: User profile of Best Western, September 2017
                                                                                • Low awareness and usage sees Ibis preform relatively poorly
                                                                                  • Figure 28: User profile of Ibis, September 2017
                                                                              • Launch Activity and Innovation

                                                                                • Google Hotel Ads overtakes TripAdvisor for return on adspend
                                                                                  • Travelodge launches its premium economy SuperRooms
                                                                                    • Marriott takes a leaf out of Airbnb’s book
                                                                                      • Figure 29: Marriott apartment-style hotel concepts in its Element-branded properties, 2017
                                                                                      • Figure 30: Marriott apartment-style hotel concepts in its Element-branded properties, 2017
                                                                                    • Hotel Zetta caters for the tech-savvy
                                                                                      • Airbnb incorporates restaurant bookings
                                                                                        • Hub by Premier Inn
                                                                                        • The Consumer – What You Need to Know

                                                                                          • Proportion of UK consumers staying in hotels remains steady but Airbnb use is growing
                                                                                            • Most consumers still prefer hotels over Airbnb
                                                                                              • Good news for direct bookings; Expedia drops its price match guarantee
                                                                                                • Most domestic holidaymakers book independently but there are benefits to selling packages
                                                                                                  • Data is becoming increasingly important for hotels
                                                                                                    • In the burgeoning automation era, human interaction still matters
                                                                                                    • Hotel Stays

                                                                                                      • Proportion of UK consumers staying in hotels remains steady but Airbnb use is growing
                                                                                                          • Figure 31: Types of accommodation used, 2014 and 2017
                                                                                                        • Can camping/caravanning present a challenge for budget hotels?
                                                                                                          • Two thirds of hotel guests have stayed in a budget hotel
                                                                                                            • Figure 32: Types of hotels used, 2016 and 2017
                                                                                                          • Benefits of Airbnb over traditional hotels
                                                                                                            • Two thirds of hotel guests are short breakers
                                                                                                              • The bleisure trend presents opportunities for UK hotels
                                                                                                                  • Figure 33: Purpose of stay in hotel, August 2017
                                                                                                                • Preferences for hotels versus Airbnb; most consumers still prefer hotels
                                                                                                                    • Figure 34: Types of accommodation used, August 2017
                                                                                                                • Hotel Research and Booking

                                                                                                                  • Good news for direct bookings; Expedia drops its price match guarantee
                                                                                                                    • Figure 35: Online research sources, August 2017
                                                                                                                  • HotelTonight broadens its booking model to allow 100-day booking windows
                                                                                                                    • TripAdvisor’s review feature helps draw in users
                                                                                                                      • Figure 36: Ranking of top OTA apps according to average monthly active users on iPhone and Android phone in the UK, 2016
                                                                                                                    • Research-to-booking trends – Direct channels and booking.com have the best ratios
                                                                                                                      • Figure 37: Online research sources, August 2017
                                                                                                                  • Package Bookings and Booking Lead Times

                                                                                                                    • Most domestic holidaymakers book independently but there are benefits to selling packages
                                                                                                                        • Figure 38: Package bookings, August 2017
                                                                                                                      • Seven in 10 book their stay within two months
                                                                                                                        • Figure 39: Booking lead time, August 2017
                                                                                                                    • Attitudes towards Data Sharing

                                                                                                                      • Data is becoming increasingly important for hotels
                                                                                                                        • Figure 40: Data sharing with hotels, August 2017
                                                                                                                      • Who is open to sharing their data?
                                                                                                                        • The importance of blending user data and other forms of data
                                                                                                                          • The growth in mobile presents opportunities to use data for more relevant targeting
                                                                                                                          • Attitudes towards Hotels

                                                                                                                            • Despite the growth of automation, human interaction still matters
                                                                                                                              • Hotel images and their role in choosing a hotel
                                                                                                                                • Around half of guests feel it is worth paying a little extra for comfort
                                                                                                                                    • Figure 41: Attitudes towards hotels I, August 2017
                                                                                                                                  • Over a quarter of guests say exercise facilities are important when staying in a hotel
                                                                                                                                      • Figure 42: Attitudes towards hotels II, August 2017
                                                                                                                                  • CHAID Analysis – Attitudes towards Hotels

                                                                                                                                    • Methodology
                                                                                                                                      • Mobile B2C communication is key for upgrades
                                                                                                                                        • Figure 43: Target groups based on statements about hotels – CHAID – Tree output, August 2017
                                                                                                                                        • Figure 44: Target groups based on statements about hotels – CHAID – Table output, August 2017
                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                        • Abbreviations
                                                                                                                                          • Consumer research methodology
                                                                                                                                          • Appendix – Market Size and Forecast

                                                                                                                                            • Forecast methodology
                                                                                                                                                • Figure 45: Best- and worst-case forecast for the number of hotel trips in the UK market, 2017-22
                                                                                                                                                • Figure 46: Best- and worst-case forecast for the number of hotel nights in the UK market, 2017-22