31 January 2019
This year, PwC titled their 2019 hospitality predictions report ‘growing through uncertain times’ highlighting how the positives and negatives of Brexit will impact the sector. They cite the weak pound supporting inbound tourism, while protracted EU negotiations undermine business travel into the UK. But Brexit is not the only factor for performance this year; Deborah Heather, Director of Quality in Tourism takes a frank look at the trend predictions for the coming year and explores what hotels can expect in the future.
At the end of 2017, my predictions for the then immediate ‘future’ of the industry ranged from the first tangible applications of AI to the celebration of ‘personal and individual’ travel experiences. You can read the original article in the December 2017 edition of the magazine, but it’s certainly been interesting to see how the predictions have panned out. What’s clear is that the international trend predictions for the coming year remain broadly similar; technological adoption is still on the cards, environment is high on traveller agendas, and our guests are more and more demanding of a personalised, bespoke experience. The difference is however that now the focus is on relevance and perceived ease, with guests hoping for genuine experiences and not add-ons just for the sake of it. Plus the UK will be tackling its own sweeping trends which are unique to the industry of our island nation.
The industry as a whole
On a macro industry scale, PwC has titled their 2019 industry predictions report ‘growing through uncertain times’ which is very telling of the UK market at the moment. At the time of writing, the expectation is that 2018 will close with 0.1% overall growth for the sector, typified by strong leisure travel growth thanks to the weak pound, which brought average occupancy rates to 76% across the UK. The same report by PwC analysts also highlights a predicted 0.5% fall in the sector in 2019; a small slump, mostly generated through supply additions as more hotels and rooms launch into the market, and a further fall in corporate demand as the world awaits our exit from the EU in March. What remains to be seen is the tangible results at the end of the coming year, when the fallout from Brexit is more clear.
I digress a little from the predictions for what should be top of the agenda for the coming year, but it’s important to start with an assessment of where the industry is now and has been. As I mentioned, along with the national ‘trends’ we can expect in the next year, the UK will be grappling with its own challenges which are strategically unique compared to our global counterparts. Aside from Brexit, perhaps the biggest potential shift in the UK market is the growing need and ambition to level the playing field between traditional and sharing economy providers. I am not one to get behind the ‘them and us’ mentality which exists for many hoteliers – I believe the sharing economy presents healthy competition and industry progress – but I am keen to see a shift to consistent application of standards and the protection of guests, whatever provision they select. Thankfully, this was a core topic for discussion as part of the Tourism APPG during 2017-2018, which culminated in a conclusion that more needs to be done to protect consumer safety, establish a level regulatory playing field across the tourism industry and ensure that all operators of accommodation are paying the appropriate level of taxation. It has been recommended that sharing economy accreditation schemes are rolled out - even name-checking our partnership with the STAA and AirBnB - something which is likely to be driven forward at great pace in 2019 and beyond. The key here is that although it has been fuelled by the consumer risks posed by some sharing economy operators, the reality is that both sharing economy providers, and hotels & traditional hospitality businesses will need to meet the same standards and complete the same minimum accreditation requirements. In recent years, the rise in review sites has prompted many to opt out of traditional accreditation schemes on the basis that user-generated content is more influential, but what this has created is a lack of accountability to the minimum regulatory and ethical requirements of operating a hospitality business. It is therefore likely that we will see resurgence in mandatory self-regulatory frameworks in the next 12 to 24 months, which underpin quality, consumer safety and transparency. A welcome change.
Brexit is also top of the agenda for likely influence for our industry over the coming months, with many feeling overwhelmed or borderline apathetic about the possible outcomes. It is of course an astoundingly large issue and one which almost lacks possible comprehension as to its scale, but much speculation abounds that inbound travel will take a knock and hospitality businesses will struggle with attracting employees in a shrinking employee pool. I feel ill-equipped to expertly advise on all the possible outcomes of Brexit and the likely impact, but what I can anticipate is resurgence in employee retention programmes, placing specific and dedicated emphasis on retaining the maximum number of employees. It is something that much of the sector is bad at, but a potential loss of overseas employees will shift the current skills shortage from a few to many, sparking a hurried and unfocussed adjustment. Better to get planning now and also to potentially take out a membership with organisations that have lobbying power like UK Hospitality, who are working to ensure that the sector is properly represented and counted, pre- and post-deal.
Perhaps the most interesting assessment I have read of the traveller market comes from booking.com, who offer a global assessment of traveller trends based on a combination of their booking patterns, and a traveller survey. It is perhaps the most tangible of all the predictions, and I encourage you to go and read it in full. In the meantime, here’s my take on their key points:
From an ops perspective, trends are more difficult to establish, not because there aren’t new solutions and expectations emerging, but because every development made must have a direct, beneficial and preferably lasting impact on your business, as well as being relevant to your overall strategy and client demands. So here’s the broad stroke ‘trends’, linked to national and international guest demands, which might factor into your plans and strategies for the coming months.
Two final points I’d like to make. The first is in relation to an article I stumbled across in The Times, from August 2018, written by Andrew Sentance. He warns “that a new wave of global protectionism is probably the greatest threat to economic prosperity here in the UK and across the world in the next five to ten years.” Now this is an interesting point and one which for me presents a unique opportunity for hospitality businesses, linked to another point from the statistical report from booking.com. They reported that “over half of global travellers (53%) report they plan to take more weekend trips in 2019”, which to me suggests that now, and in the coming years, businesses have the opportunity to create a loyal and established UK fan base who visit regularly and have less of the challenges presented by overseas visitors – more repeat visits, less language barriers, and more opportunity for the last-minute stay. The second is that ultimately trends are and should be just guidelines; they are a useful litmus test for what’s to come and what you need to plan for, but more importantly your focus is and should be on your guests and what they want. Question, consider and innovate, but do it with your actual guests in mind, not the fictitious statistical ones!