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UK Hotels market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Hotels market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

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 VFR (visiting friends and relatives) purposes. The consumer sections focus on the domestic market.

Key points covered

  • Engaging the Airbnb generation
  • Mix-and-match guests
  • Personalisation is the key to loyalty
  • Embracing wellness trends
  • Luxury/budget polarisation amongst Millennial travellers

What you need to know

The volume of UK hotel stays reached 61.9 million and the number of nights reached 174.5 million in 2017. These were new record levels for the industry. 2018 is expected to show a slight fall from these record highs, triggered by a fall in inbound tourism as the 2016-17 boom delivered by the weak Pound has begun to wane.

The brand strength of Airbnb presents a growing competitive challenge, but the traditional advantages of service and reliability are still key weapons in the hotel armoury. There is considerable product innovation in the budget and luxury/boutique sectors, with a focus on attracting the Millennial traveller. Rapidly growing inbound tourism from emerging markets, especially China, is opening up new opportunities.

Expert analysis from a specialist in the field

Written by John Worthington, a leading analyst in the Leisure sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

There is relatively little new product development in the mid-market tier where brands tend to be weaker and less differentiated, and risk being squeezed between the more dynamic economy and upscale sectors. However, demand for mid-market hotels remains strong and many consumers are willing to pay ‘a bit extra’ for an enhanced level of experience. John Worthington
Senior Leisure Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Record highs in 2017, but slight dip expected in 2018
              • Figure 1: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2013-23
              • Figure 2: Total volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 2013-23
            • Companies and brands
              • Branded chains control an estimated 50% of market
                • Big two budget chains account for an estimated 14% of rooms
                  • Figure 3: Top 10 hotels in the UK, by site numbers, October 2018
                • The consumer
                  • Consumer demand has dipped…
                    • Figure 4: Use of hotels in the past 12 months, August 2014-September 2018
                  • …but frequent guests have increased
                    • Figure 5: Number of hotel stays in the past 12 months, September 2018
                  • 62% of guests go budget
                    • Figure 6: Types of hotel stayed in during the past 12 months, September 2016-September 2018
                  • OTAs assert control
                    • Figure 7: Overall channels to market used for last hotel stay, September 2015 and September 2018
                  • Food and personalisation are key ways for hotels to stand out
                    • Figure 8: Factors that can attract hotel guests, September 2018
                  • Super-budget hotels grow but most consumers are prepared to pay for a better experience
                    • Figure 9: Attitudes towards hotels, September 2018
                  • Hotels preferred to Airbnb
                    • Figure 10: Attitudes towards hotels versus Airbnb, September 2018
                  • What we think
                  • Issues and Insights

                    • Engaging the Airbnb generation
                      • The facts
                        • The implications
                          • Luxury/budget polarisation amongst Millennial travellers
                            • The facts
                              • The implications
                                • Mix-and-match guests
                                  • The facts
                                    • The implications
                                      • Personalisation is the key to loyalty
                                        • The facts
                                          • The implications
                                            • Embracing wellness trends
                                              • The facts
                                                • The implications
                                                • The Market – What You Need to Know

                                                  • Hotel stays and nights reach record levels in 2017...
                                                    • …but demand has softened in 2018
                                                      • Brexit uncertainty ahead
                                                        • 2017 marked a new staycation high
                                                          • US and Chinese visitor spend rising
                                                          • Market Size, Segment Performance and Forecast

                                                            • Inbound visitor surge takes hotel stays to new high in 2017
                                                              • Figure 11: Total volume of trips and nights staying in UK hotel/motel/guesthouse, 2013-23
                                                            • Overseas visitors accounted for almost half of hotel nights in 2017
                                                              • Figure 12: Volume of trips and nights staying in UK hotel/motel/guesthouse, by domestic and inbound visits, 2013-18
                                                            • Performance metrics strong in 2017, flatter in 2018
                                                              • Brexit challenges
                                                                • Figure 13: UK hotels forecast, 2017-19
                                                                • Figure 14: Total volume forecast of hotel/motel/guesthouse trips (domestic and inbound), 2013-23
                                                                • Figure 15: Total volume forecast of hotel/motel/guesthouse nights (domestic and inbound), 2013-23
                                                            • Market Background

                                                              • Economic growth sluggish but wages begin to rise
                                                                • Figure 16: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year on year, January 2014-September 2018
                                                              • Domestic tourism visits up 4% in first half of 2018
                                                                • Figure 17: Domestic tourism market (GB) (all tourism), 2013-17
                                                              • Staycation record
                                                                • Figure 18: Domestic tourism, by trip volume and purpose, 2013-17
                                                              • Inbound slump likely to be felt most in London after record growth
                                                                • Figure 19: Total inbound tourism markets (all tourism), 2013-17
                                                                • Figure 20: Inbound tourism, by trip volume and purpose, 2013-17
                                                              • Emerging opportunities
                                                                • Figure 21: Top 10 inbound source markets, by volume*, 2013-17
                                                                • Figure 22: Top 10 inbound source markets, by value*, 2013-17
                                                              • Currency matters
                                                                • Figure 23: Spot exchange rate, Pound Sterling versus euro and US Dollar, June 2016-October 2018
                                                            • Companies and Brands – What You Need to Know

                                                              • Half of rooms in branded chains
                                                                • Whitbread to focus on Premier Inn
                                                                  • Travelodge launches ‘budget chic’
                                                                    • IHG expanding luxury UK offer
                                                                      • Accor focusing on guest tech
                                                                        • Boutique lifestyle trend
                                                                          • Premier Inn has strongest brand
                                                                          • Market Share

                                                                            • Over 800,000 hotel rooms in 2018
                                                                              • Branded chain share is growing
                                                                                • Premier Inn
                                                                                  • Travelodge
                                                                                    • InterContinental Hotels Group
                                                                                      • Accor
                                                                                        • Figure 24: Top 10 hotels in the UK, by site numbers, October 2018
                                                                                      • Best Western
                                                                                        • Hilton
                                                                                          • Marriott
                                                                                            • Wyndham
                                                                                            • Brand Research

                                                                                                • Brand map
                                                                                                  • Figure 25: Attitudes towards and usage of selected brands, August 2018
                                                                                                • Key brand metrics
                                                                                                  • Figure 26: Key metrics for selected brands, August 2018
                                                                                                • Brand attitudes: Trust is high for Premier Inn and Holiday Inn
                                                                                                  • Figure 27: Attitudes, by brand, August 2018
                                                                                                • Brand personality: Hilton and Marriott seen as most exclusive
                                                                                                  • Figure 28: Brand personality – Macro image, August 2018
                                                                                                • Travelodge seen as basic/functional
                                                                                                  • Figure 29: Brand personality – Micro image, August 2018
                                                                                                • Brand analysis
                                                                                                  • Premier Inn
                                                                                                    • Figure 30: User profile of Premier Inn, August 2018
                                                                                                  • Travelodge
                                                                                                    • Figure 31: User profile of Travelodge, August 2018
                                                                                                  • Hilton
                                                                                                    • Figure 32: User profile of Hilton, August 2018
                                                                                                  • Marriott
                                                                                                    • Figure 33: User profile of Marriott, August 2018
                                                                                                  • Holiday Inn
                                                                                                    • Figure 34: User profile of Holiday Inn, August 2018
                                                                                                  • Best Western
                                                                                                    • Figure 35: User profile of Best Western, August 2018
                                                                                                  • Airbnb
                                                                                                    • Figure 36: User profile of Airbnb, August 2018
                                                                                                • Launch Activity and Innovation

                                                                                                  • Super-budget
                                                                                                    • Budget-plus
                                                                                                      • Accor using WhatsApp
                                                                                                        • The smart room
                                                                                                          • Alexa for Hospitality
                                                                                                            • Personalised gestures
                                                                                                              • Themed hotels – beer
                                                                                                                • Themed hotels – wellness
                                                                                                                  • Experiences
                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                    • Hotel penetration slips but frequency rises
                                                                                                                      • 62% of guests stay in budget hotels
                                                                                                                        • Third-party booking shift
                                                                                                                          • Food is key to standing out
                                                                                                                            • Experience valued more than functionality
                                                                                                                              • Millennials grasp capsule concept
                                                                                                                                • Consumers prefer hotels to Airbnb
                                                                                                                                • Hotel Stays

                                                                                                                                  • Independent hotels dwindling but demand remains stable
                                                                                                                                    • Figure 37: Use of hotels in the past 12 months, August 2014-September 2018
                                                                                                                                  • Hotel usage still far outstrips rental property
                                                                                                                                    • Figure 38: Use of all tourist accommodation in the past 12 months, September 2018
                                                                                                                                  • Men are more frequent guests than women
                                                                                                                                    • Figure 39: Number of hotel stays in the past 12 months, September 2018
                                                                                                                                  • Frequency of stay has increased
                                                                                                                                    • Figure 40: Number of hotel stays in the past 12 months, September 2016 and September 2018
                                                                                                                                  • ‘Mix-and-match’ hotel guests
                                                                                                                                    • Figure 41: Types of hotel stayed in during the past 12 months, September 2016-September 2018
                                                                                                                                  • Luxury/boutique segments have younger bias
                                                                                                                                    • Affluent singles offer upscale opportunity
                                                                                                                                      • Short leisure breaks account for 58% of trips
                                                                                                                                        • Figure 42: Purpose of last hotel stay, September 2018
                                                                                                                                    • Hotel Booking

                                                                                                                                      • Hotels grow more reliant on third-party bookings
                                                                                                                                          • Figure 43: Booking methods used for last hotel stay, September 2015 and September 2018
                                                                                                                                          • Figure 44: Overall channels to market used for last hotel stay, September 2015 and September 2018
                                                                                                                                      • Hotels – Potential Attractions

                                                                                                                                          • Going beyond price
                                                                                                                                            • Foodie hotels
                                                                                                                                              • Figure 45: Factors that can attract hotel guests, September 2018
                                                                                                                                            • Getting personal
                                                                                                                                              • Figure 46: Attitudes towards selected hotel brands, August 2018
                                                                                                                                            • Country-house hotels in the city
                                                                                                                                              • Total wellbeing
                                                                                                                                                • The gastro-vegan hotel
                                                                                                                                                  • Designer/themed/high-tech/social hotels offer niche opportunities
                                                                                                                                                    • Airbnb-style experiences
                                                                                                                                                      • The cat hotel
                                                                                                                                                        • Bed, breakfast and service with a smile seen as core elements in a great hotel
                                                                                                                                                        • Hotel Attitudes – Price versus Experience

                                                                                                                                                          • 61% of adults think it’s worth paying extra for a better experience
                                                                                                                                                            • Hotel experience especially important to women and empty nesters
                                                                                                                                                              • Figure 47: Attitudes towards hotels, September 2018
                                                                                                                                                            • Special-occasion luxury
                                                                                                                                                              • Hybrid Millennials
                                                                                                                                                                • Urban minimalism
                                                                                                                                                                • Hotel Attitudes – Hotels versus Airbnb

                                                                                                                                                                  • Hotels retain traditional advantages over Airbnb
                                                                                                                                                                    • 25% of adults see Airbnb as better value
                                                                                                                                                                        • Figure 48: Attitudes towards hotels versus Airbnb, September 2018
                                                                                                                                                                      • Millennials show strong recognition of Airbnb strengths
                                                                                                                                                                        • Figure 49: Attitudes towards hotels versus Airbnb, Millennials versus others, September 2018
                                                                                                                                                                        • Figure 50: Attitudes towards hotels versus Airbnb, hotel guests versus rental property guests, September 2018
                                                                                                                                                                      • Young urban professionals are most likely to prefer Airbnb
                                                                                                                                                                        • Figure 51: Hotels – CHAID – Tree output, September 2018
                                                                                                                                                                      • Engaging the Airbnb generation
                                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                                  • Figure 52: Total volume of trips staying in UK hotel/motel/guesthouse, 2018-23
                                                                                                                                                                                  • Figure 53: Total volume of nights staying in UK hotel/motel/guesthouse, 2018-23
                                                                                                                                                                                • Forecast methodology