19 December 2017
With a 19,000 room increase in the UK expected and uncertainty over Brexit, alongside predictions from PwC for growth next year, forecasts are turbulent and unclear for 2018. Deborah Heather, Director of Quality in Tourism takes a frank look at next year’s trend predictions and explores what hotels can expect in the future.
With breaking news that a ‘divorce bill’ has been agreed for Brexit, for a currently undisclosed amount, there is quiet speculation about the long-term effects on the UK hospitality industry. Will the weak pound continue to herald intrinsic growth and success for hotels, or will increased competition and staffing issues ring the death knoll for inefficient businesses? Deborah comments “There is a very interesting mood in the UK hospitality industry and we’re seeing very different reactions from businesses. On the one hand, my assessors are reporting an era of unprecedented innovation, with diversification, specialisation and renewed customer focus from many businesses, while on the other, reports of a dull complacency abound. It is truly unique and promises an interesting marketplace for the coming years.”
She continues “Some businesses are slipping into the easy trap of blaming a turbulent market for poor or sub-par performance, doing what they’ve always done, but no longer getting what they have always got. Consumer demands are changing, and some businesses are failing to acknowledge this change. It’s truly astounding.”
“One colleague made an interesting statement during our discussion the other day stating ‘although we face unprecedented challenges and new frontiers, there is no point complaining about it; all businesses have to find a way to succeed despite these challenges’; a sentiment that I can truly get behind,” Deborah concludes. “What remains is to see whether hotels can and will get on the self-improvement bandwagon, or whether they will naively expect to perform based on historic heights.”
Years ago, many hoteliers wanted or chose to ignore TripAdvisor, dubbing it a ‘flash in the pan’ or passing fad. Yet now, TripAdvisor boasts status as one of the leading online travel agents, with thousands of reviews and experiences being added every day. Now, despite supporting, or at least recognising the penetration of the site within the market, still hoteliers continue to ignore what it represents – raw data which can contribute to their continued and progressive improvement. Deborah comments “At an industry event a few weeks ago, I started a lively discussion with a small group of hoteliers to uncover exactly what they do with these reviews. Comments ranged from their process to reply to the negatives, to their use of positive comments on promotional materials, but not one identified how they specifically analyse what this feedback is telling them or seek to shore up the positives and adapt with the negatives. TripAdvisor is a feedback goldmine, with your actual customers volunteering their experiences, and yet it’s largely viewed as nothing more than user-generated stars that support sales. Very interesting.”
Reflecting on this year, it has also been clearly typified by growing concern over the sharing economy, and the impact this has on consumer demand and sales. Interestingly, this competition is being viewed in a like-for-like manner; true people are renting out their rooms to make money and compete with hotels, but what we are forgetting is that we are in a service industry, built on more than just the bedstead and mattress. “I understand that the sharing economy is definitely impacting on the bottom line, but as an industry, we’re approaching this as a hostile enemy and not as a different market. First off, much of the buying process is different,” comments Deborah “and second, there is so much more that we do as an industry which the sharing economy doesn’t. Our staff are there when things go wrong, offering dedicated support, we are legally compliant and safe as businesses, we offer a personalised, personal service which the sharing economy spouts, but frequently does not deliver, and these are all things with which we can continue to attract guests.”
According to PwC, hotel performance is set to remain positive in 2018, with year-on-year occupancy growth of 2.3% forecast, and average daily rates due to increase by 2.2% in 2018 to £148. The addition of 19,000 new bedrooms into the market will have an impact, not on the performance of the whole market but largely on the performance of individual establishments. Specific global and national trends will also have their own impact on the UK market, including:
“Trends are just that,” Deborah concludes “they are simplified patterns and predictions based on previous and expected behaviours. Looking through the list above, there are some really weighty issues pending and I anticipate that many businesses will struggle to succeed adopting them all. Instead, I will return to my earlier point that now is a time to listen to your current and future guests, and to enter a period of continuous reinvestment to build on and cement your successes. Many of the businesses that we are assessing are flourishing, not because they follow all the trends, but precisely because they don’t. They are simply re-evaluating their businesses, and doing things differently in a bid to create a unique, covetable experience. That more than anything will shore up future performance and success, and I for one am excited about the prospects of a varied, unique and innovative marketplace, should businesses choose to challenge themselves.”Quality in Tourism is launching a new series of industry standards and assessments for 2018, focussing on guest experience rather than traditional facilities standards. Watch out for the January issue when we’ll be taking a look at the new approach and looking at what this means for traditional star grading.