Research and Markets: Hotels Market Report Plus 2011 (United Kingdom)
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Research and Markets: Hotels Market Report Plus 2011 (United Kingdom)
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Category: Europe - United Kingdom - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2011-06-13
After the economic turmoil of 2008 and 2009, 2010 saw a return to normality for some in the hotel business with the shoots of recovery apparent in some areas. Key Note estimates that the hotel industry suffered a 10.5% decline in overall market value in 2009, falling to its lowest value in 3 years after an extended period of strong growth. However, in 2010, in line with the fragility of the economic recovery, the hotel market also appears to be recovering slowly, with a 3.5% increase in total value from 2009. As the recovery is slight, the market value remains dramatically lower than it was before. Nevertheless, the future is looking promising again for the UK hotel market.
Driving the UK hotel market’s recovery is London’s excelling performance compared with regional hotels; those in the city enjoy higher room rates and revenue per available room (RevPAR). Occupancy rates for 2010 have shown a huge improvement, with recovery to levels witnessed before the recession. The corporate sector is also showing improvement. More UK residents are visiting hotels in the UK — thanks in part to the trend of holidaying within the country — and a greater proportion of overseas and UK residents are choosing to stay at hotels rather than other forms of accommodation.
The economic recovery, albeit slow and fragile, is a good sign for the hotel industry; the performance of the hotel industry closely correlates with the performance of the economy as a whole. Unemployment is set to reduce in the next few years, which should allow for more household expenditure on holidays and therefore hotels. Key tourist markets such as Germany — a nationality making up one of the biggest proportions of the UK’s overseas visitors — are also experiencing recovery.
For the future, the hotel industry has a number of big opportunities from which it can capitalise on. The Royal wedding in 2011 and the Olympic Games in London in 2012 provide great opportunities to boost occupancy and revenues, if managed well. The Government’s new tourism initiative, which — if successfully executed — should also generate tourism for the biggest target market, is also coming into effect. Emphasising the benefits of tourism outside London is crucial to the growth of the hotel market, as regional hotels are still struggling compared to the capital city’s hotels.
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