In order to keep the attention of discerning hotel guests, and socially conscious millennials in particular, operators need to understand the ins and outs of the shifting hospitality landscape – as do the designers, architects and construction professionals working in the sector. Brexit has brought with it a great deal of uncertainty across many industries, certainly not least of which is the UK’s hospitality sector.
Despite looming concerns, hotels in London, the world’s second most popular destination, saw a positive end to 2017.
Having engaged with experts representing multiple realms of the ‘property food chain’, it seems the sector is set to continue its steady position for 2018.
To mark the first Impression of the year, we spoke to divisional representatives from global property and real estate companies, Lambert Smith Hampton and Cushman and Wakefield, construction services company, ISG, and the British Hospitality Association, to gauge a further understanding of the performance of the sector, as well as the trends that are influencing its ongoing evolution. We also asked the key question – ‘what’s next?’ – in order to find out where the sector is heading and how operators and their design teams can make the most of the opportunities available.
‘Despite looming concerns for London’s hospitality sector within a Brexit climate, hotels in the world’s second most popular destination saw a positive end to 2017 with RevPAR (revenue per available room), occupancy and ADR (average daily room rate) all increased. Performance in London (up 5% in RevPAR terms) outstripped the overall regional UK market, albeit cities such as Edinburgh performed particularly well, up nearly 13% on the same metric, again largely on the back of strong ADR growth. Investment activity recorded another strong year with UK sales volumes over £5bn, recognising the continuing attraction of the UK market to both domestic and international buyers.’ – Jonathan Hubbard, Head of Hospitality EMEA, Cushman & Wakefield
‘The outlook for hotel performance overall is very healthy and experiencing something of a boom as a result of the weak pound. Visitors from overseas are keen to take advantage of the situation while it lasts, and Brits are keen to make the most of their money by taking staycations.’ – Alistair Greenhalgh and Simon Stevens, Directors, Lambert Smith Hampton’s specialist hotels division
‘Our visibility suggests the three sector strands that we target, namely fit-out of new buildings (hotel being a small element of a larger scheme), refurbishment of existing buildings (usually city centres) and new builds (standalone new hotel buildings) are all performing very well, but there does appear to be a slight slowing in the rate of opportunities coming to tender. The reasons remain varied, as you’d expect, but there appears to be a determination amongst our clients that their projects will be developed.’ – Steven McGee, Divisional Director, UK Hospitality Division, ISG
‘With every new generation comes new ideas. Customers’ tastes are constantly evolving and keeping up with trends can be difficult. The hospitality industry is seen as a leader when it comes to innovation in interior design, with many looking at the sector for inspiration. Millennials are inherently very digitally-minded as well as socially-conscious, and this is no doubt coming through in how things will be run in future.
‘Environmental sustainability is also taking centre stage in many businesses, with our members constantly looking for innovative ways to cut waste and their carbon footprint. One such example is the work of Mitchells and Butlers, who have implemented a ‘no straw’ policy across their sites. We will no doubt be seeing more game changing ideas like this in the future.’ – Vernon Hunte, British Hospitality Associations Government Affairs Director
‘We will continue to see the hotel sector being recognised as a core property investment sector, alongside retail, offices and logistics. The positive global tourism trends will underpin the development of the sector and hotels will benefit from a diversified global investor mix. The impact of disruptors, influenced by developments in technology, will keep challenging traditional hotel models but the industry will meet this challenge and satisfy an increasingly demanding customer base.’ – Jonathan Hubbard, Head of Hospitality EMEA, Cushman & Wakefield
‘We believe the sector has huge potential and we are excited by the emergence of new brands targeting the UK, which is a great vote of confidence in both the hospitality sector as well as ISG. This enthusiasm is spread across budget, mid-scale and luxury sectors. The entry of new brands can only be seen as a positive indicator for the sector in the short and medium terms.’ – Steven McGee, Divisional Director, UK Hospitality Division, ISG