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UK: Research from business advisors BDO says London boutique hotels were more successful in raising their rates in 2013 than all other sectors of the capital’s hotel industry.
BDO’s Hotel Britain report assessed information from the large hotel groups, individual properties and boutique operators including Firmdale Hotels, Red Carnation Hotels, Rocco Forte Hotels, and Malmaison.
The report found that London boutique hotels were the only segment that managed to increase their rates considerably in 2013, “thanks to burgeoning demand for such properties”.
“Despite a 5.1 per cent increase in average room rate, occupancy remained fairly stable at 78.5 per cent, resulting in a rooms yield growth of 4.6 per cent. The boutique segment was the year’s best performer in London, even as the top end (usually a more stable category) experienced the lowest increase in rooms yield, up by a modest 0.6 per cent to £199.28,” said the report.
“Regular travellers, including new segments like the ‘millennials’ generation, continue to choose the boutique segment as an alternative to more traditional upscale accommodation. Hotel groups are recognising the importance of this bracket and introducing new boutique hotel concepts such as W,” it added.
Moving on to the UK market in general, BDO predicted that the millennials will be a major influence on the hotel market as a whole: ” Fast-changing times means that the industry must race to keep up, devote more time and resources to new media to appeal to evolving demographics. In particular, new market segments such as the millennials (broadly speaking, those born in the mid-80s onwards) are already driving the changes with their embrace of technology and their need for fast and personalised service.”
The growth of the millennial sector will be one of the driving forces behind the growth of the “budget boutique sector”: “The outlook for future transactions will also hinge on the brand diversification of the budget sector. This includes the introduction of the Hub by Premier Inn concept, the planned refurbishment of Travelodge hotels across the UK, and the entry or expansion of other brands such as Moxy, Tune and Z Hotels.”
Although the London boutique sector – much of which is made up of independent properties – is faring well, the outlook for independents nationally is challenging, finds the report, which says: “The UK hotel sector remains largely independent, with a sizeable census of smaller establishments. As brand proliferation continues,with growing pressure on independents to improve their offering, we can expect to see some of this supply reduced or converted. Much has been written in recent years about the state and condition of many independent properties, so it is likely that those which fail to meet modern standards will have to change in order to remain competitive.”
The issues covered here and many more will be debated at the forthcoming Boutique and Lifestyle Hotel Summit and Hostel and Budget Traveller 2014conferences.
To read BDO’s Hotel Britain report, click here.
www.bdo.co.uk
