British hotel market grows

12th Dec 2005

The UK hotel accommodation market valued at GBP 11.52bn in 2004, has increased by 4.5 percent since 2000. Corporate sales accounted for the largest share of revenue.

Prices tend to be higher in this sector, and sales are generated not only from nights spent in rooms, but also from the use of facilities. These include conference and meeting rooms, with many of the major hotel groups having established separate brands for this market.

A number of the major hotel groups have been investing in facilities to target this sector, as well as developing incentive and reward schemes to gain an increased share of expenditure on a global basis.

The consumer market has also experienced ongoing improvement since 2001. Both rising levels of household disposable income and the ease of access to booking and reservations through the Internet have played a part in this. The development of the short breaks market has also been an important factor.

The major players in the UK market are led by Premier Travel Inn (created from Whitbread’s merger of the Premier Lodge and Travel Inn brands). This chain forms part of the thriving UK budget hotel sector, which has seen strong growth and is earmarked for further expansion in the future. Other major brands in the UK market include international names such as Hilton, Marriott, InterContinental and Le Meridien.


An ongoing feature of the market has been the move to divest property assets and lease them back through management contracts, allowing the brand operations to continue without the weight of property on the balance sheets. This has also played a useful role in freeing up capital for investment in chains, as well as to return to shareholders.

There has been a slight rise in the percentage of the UK population staying in hotels for both leisure and business purposes. Around a third of UK consumers used hotel accommodation in 2005. The largest increase has been in the number of weekend stays. The number of business visits has also risen during mid-week periods.

By mid-2005 there were some reports of a steadying off of UK room occupancy levels. This is likely to have been due to the terrorist attacks on London in July 2005. However, most hoteliers are optimistic that the impact will be short-lived and that sales will continue to follow a positive trend in the coming years.


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