UK Hotels Market Report 2024

Market Intelligence Reports Hotels and Accommodation UK

Mintel’s hotel market research finds that the UK Hotel market remains under pressure from higher operational costs. To adapt, hotels need to focus on efficiency gains, such as accelerating AI projects, as well as increasing the supply of apartment-style hotels to encourage longer stays, and offering more add-ons in booking systems to increase revenue.

UK Hotel Market Analysis

The number of hotel stays is expected to have increased this year, largely driven by a continued recovery in inbound tourism. Nevertheless, the volume is expected to end below 2019 levels in 2024. With over half of hotel guests expressing interest in glamping at a hotel’s site, hotels are well-positioned to expand their presence in this growing industry. Interest is particularly strong among younger and more affluent demographics.

Mintel’s consumer research found that guests are most willing to pay extra for room selection, so providing more choices in rooms and amenities will increase appeal. Catering to larger groups with options like family rooms and adjoining or interconnected rooms is crucial, as space and suitability for larger groups is a competitive advantage of holiday rentals. There are also plenty opportunities to offer experiences on-site and in the local area.

UK Hotel Market Statistics

UK hotel consumer statistics: Mintel’s UK hotel market research found that half of UK adults stayed in a hotel in the twelve months up to September 2024.

UK Hotels Market Report – What’s Inside?

Key Topics Analysed in the Report

Future demand for hotel stays in the UK and which types of hotels and travel purposes show growth potential
Factors that most influence the choice of a hotel, including the importance of star rating vs customer reviews
Interest in hotel facilities and services, such as cancellation protection and sleep-enhancing amenities, and the willingness of guests to pay extra for these
Ways for hotels to enhance their competitiveness amid increased competition from rental properties

Report Scope

For the purposes of this report, Mintel has used the following definitions: Hotel stays or trips refer to overnight visits of one night or more, staying in UK hotels for leisure, business, visiting friends and relatives and other purposes.
The market size and forecast sections cover both domestic and inbound visitors staying in hotels in the UK. The consumer sections focus on the domestic market.
Data on the size of the domestic market is for Great Britain (ie Northern Ireland is not included), data for the inbound market is for the UK.

Meet the Expert Behind the Analysis

This report was written by Marloes De Vries, Travel Analyst at Mintel. Marloes is a research analyst at Mintel, focusing on the travel sector. She previously worked as a researcher for the British and Dutch tourist boards, after having been a project leader in the field of tourism and leisure at a leading market research agency in Amsterdam. Marloes holds a degree in Tourism Management.

Effective ways for hotels to increase revenue are expanding the number of room selection options and offering experiences on-site and in the local area.

Marloes De Vries
Travel Analyst

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Executive Summary
- Opportunities for the UK hotel market
- Three opportunities for the UK hotel market
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- Volume is expected to take several years to recover
- Market value is forecast to remain above pre-pandemic levels over the next five years
- Hotel supply expected to increase over the coming years
- What consumers want and why
- Half of UK adults stayed in a UK hotel in the past year
- Graph 1: use of main forms of overnight accommodation in the UK in the past 12 months, 2018-24
- Hotel websites and hotel booking websites are the main booking channels
- Graph 2: top 5 booking methods used for last hotel stay in the UK, 2024
- Budget and luxury options will be more resilient
- Graph 3: intentions to stay in a UK hotel in the next 12 months, by type of hotel, 2022-24
- Room facilities strongly influence hotel choice
- Opportunities to broaden appeal
- Room selection, cancellation protection and late check-out are the most preferred add-ons
- Graph 4: willingness to pay more for select hotel facilities and services, 2024
- Innovation and marketing
- Connecting guests with experiences
- Many innovations are focussed on AI, sustainability and loyalty
Market Dynamics
- Market size
- Volume grows, but still lags behind pre-pandemic levels
- Graph 5: volume of UK hotel/motel/guesthouse trips (domestic and inbound), 2019-24
- Inbound market expected to outperform domestic market
- Market value increased at a slightly faster pace
- Graph 6: value of the UK hotel and similar accommodation sector, at current prices, 2019-24
- Market forecast
- Volume is expected to take several years to recover
- Market value is forecast to remain above pre-pandemic levels over the next five years
- The outlook remains promising
- Market segmentation
- Inbound segment continues to benefit from pent-up demand
- Graph 7: volume of domestic stays in hotels/motels/guest houses in Great Britain and inbound stays in hotels/guest houses in the UK, 2019-23
- Recovery of inbound hotel market in line with overall inbound market
- Domestic hotel market faced various challenges in 2023
- Market share
- Premier Inn is the UK’s market leading hotel company in terms of site numbers
- Graph 8: leading hotel operators, by estimated UK site numbers, 2024
- Premier Inn aims to its maintain leading position through growth and innovation
- Travelodge expects to have upgraded half of its rooms by the end of 2024
- Growing segments on the supply side
- Hotel supply in the UK is expected to increase
- Market drivers
- Brits continue to feel the pressure from the increased cost of living
- Graph 9: the financial confidence index, 2016-24
- Autumn 2024 Budget to slow consumer spending rebound in the short term
- Attractive exchange rate contributed to more visits from the US
- Graph 10: annual average sterling exchange rate to euro and US Dollar, 2013-24
- Enthusiasm for travel that surged post-pandemic has cooled
- Graph 11: use of overnight accommodation in the UK in the past 12 months, 2018-24
- Average daily rate growth slows down
- Over-65 are the fastest growing age group
- Ageing population offers opportunities for growth…
- Graph 12: population projections, by age, 2030 and % change compared to 2023
- ….but more can be done to protect confidence in travel as guests age
What Consumers Want and Why
- Use of hotels vs other accommodation
- Half of UK adults stayed in a UK hotel in the past year
- Holiday rental property market retained increased customer base
- Graph 13: use of main forms of overnight accommodation in the UK in the past 12 months, 2018-24
- Strengthening the position amid increased competition
- Younger audiences are more likely to choose other forms of accommodation
- Graph 14: demographic profile of those who used hotels, rental properties or other accommodation in the UK in the past 12 months, 2024
- Hotel chains are the most popular choice…
- Graph 15: use of overnight accommodation in the UK in the past 12 months, 2024
- …but its share is trending downwards
- Graph 16: use of hotels in the UK in the past 12 months, by type of hotel, 2018-24
- Chains look to enrich their portfolio with unique accommodations
- Booking method
- Even split between direct and indirect bookings
- Initiatives to boost direct bookings should be more focussed on younger audiences
- Graph 17: booking channel used for last hotel stay in the UK, 2024
- Nearly two thirds book UK hotel stays online
- Graph 18: booking method used for last hotel stay in the UK, 2024
- Most online bookers turn to a hotel’s website or a hotel booking website
- Graph 19: online booking methods used for last hotel stay in the UK, 2024
- Brands are aiming to boost app usage
- Most offline bookings are made directly with the hotel
- Graph 20: offline booking methods used for last hotel stay in the UK, 2024
- Future intentions to stay in hotels
- Majority of Brits expect to stay in a UK hotel in the coming year
- Budget hotels dominate the market
- Graph 21: intentions to stay in a UK hotel in the next 12 months, by type of hotel, 2024
- Budget and luxury options are more resilient
- Graph 22: intentions to stay in a UK hotel in the next 12 months, by type of hotel, 2022-24
- Increased cost of living makes it harder to justify short getaways
- Graph 23: purpose of UK hotel stays in the next 12 months, 2022-24
- Stimulating the short break market
- Decisive factors when choosing a hotel
- Room facilities and local area strongly influence hotel choice
- Graph 24: factors that most influence choice of hotel, 2024
- Enhancing room facilities can increase the perceived value of budget hotels
- Linking guests to experiences both on-site and in the local area
- Potential experience-related partnerships
- Reviews matter to over a third of hotel guests
- Graph 25: influence of star rating and online customer reviews on choice of hotel, by type of hotel guests expect to stay in, 2024
- Dining is an integral part of a luxury hotel stay
- A hotel’s appearance heavily influences young women
- Interest in facilities and services
- Strong interest in cancellation protection
- Graph 26: interest in hotel facilities and services, 2024
- Opportunities to broaden the appeal
- Apartment-style hotels have strong growth potential
- Families are a key target group for all-inclusive deals
- Quality of food and drink is key when offering all-inclusive deals
- Hotels are well positioned to increase their share of the glamping industry
- Connecting with nature in comfort
- Willingness to pay more for add-ons
- More flexibility in the booking process will help increase revenue
- Offering room selection is among the most effective ways to upsell
- Consumers prefer brands to reduce carbon emissions rather than rely on offsetting
- Graph 27: willingness to pay more for select hotel facilities and services, 2024
- Business travelers show more interest in a hotel’s sustainable operations
- Growing interest in improving wellbeing
- Bridging the technology gap
- Graph 28: willingness to pay more for a smart room, by age, 2024
Innovation And Marketing Trends
- Launch activity and innovation
- Hotels are increasingly integrating generative AI
- Connecting guests with experiences
- Sustainability remains high on the agenda
- Brands enrich loyalty programs and learn as they go
- Hotel booking systems increasingly allow for customisation
- Advertising and marketing activity
- OTA’s dominate the top five ad spenders
- Graph 29: top 10 above-the-line, online display and direct mail advertising expenditure by key players in the UK hotel market, 2023
- Premier Inn launches Do Your Thing campaign
- Warner Hotels launches campaign to support rebrand
- Hilton launches national advertising campaign in the metaverse
- Airbnb continues to promote advantages over a hotel
Appendix
- Supplementary data
- Barriers to staying in holiday rental properties
- Graph 30: reasons for not being interested in staying in a holiday rental property, by type of accommodation used, 2024
- Main benefits of holiday rental properties compared to hotels
- Graph 31: main benefits of a holiday rental property compared to a hotel, by type of accommodation used, 2024
- Market forecast data and methodology
- Market size domestic and inbound markets
- Total market size and forecast
- Market forecast and prediction intervals (volume)
- Market forecast and prediction intervals (value at current prices)
- Market forecast and prediction intervals (value at constant prices)
- Forecast methodology
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Consumer research methodology
- Snoop SpendMapper methodology
- Nielsen Ad Intel coverage
- Annual Business Survey by the ONS

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