Hotels Market Report Plus 2008
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Hotels Market Report Plus 2008
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-01-28
Between 2003 and 2007, the UK hotel market increased by 31.4% in value, reaching £15.07bn. Growth over this period has been against a positive economic backdrop and, in part, also reflects the recovery of the global travel market after 2002.
The corporate sector of the market continues to be significant to hotel operators. It not only includes accommodation, but also other facilities such as meeting rooms and conference venues, and services such as food and beverages. The UK remains an important business destination, although expenditure on business travel dipped slightly in 2007.
Within the consumer sector, holidays and short breaks account for the majority of activity, although additional services — for example, the use of hotels as a venue for occasions such as weddings or Christmas parties — are also included. Consumer disposable income levels have been rising since the mid-1990s and spending in categories such as travel and leisure has increased along with it. A trend towards taking second domestic short-break holidays or weekends away has also become more established.
The hotel market has continued to see ongoing consolidation as the larger operators continue to develop. Major players in the UK market include InterContinental, Premier Inn, Travelodge, Marriott and Hilton International. All the major groups have been expanding their portfolios through the acquisition of new sites and locations, as well as investing in refurbishment at existing properties.
Branding has become a significant feature in the hotel industry, with many companies operating internationally. The budget and luxury ends of the market have seen the most activity. The budget hotel sector has opened up the market to a wider range of clientele and, in light of the economic downturn, it is strongly positioned. An increasing number of brands have also been launched at the top end of the market, such as W from Starwood Hotels and Resorts, and So by Sofitel from Accor.
The economic dip in the global economy, combined with rising energy and food costs, is making the short- to medium-term outlook for hotel operators difficult. It is likely that mid-market operators will be most vulnerable, as clients look to either extreme of the market for basic or luxury options.
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