Last week saw the first virtual Annual Hotel Conference take place. Slick and professional with all content pre-recorded and no technical mishaps (yes really) – the conference brought together investors, developers, media, local Government and others from the accommodation sector to listen to some very high profile names and personalities giving their thoughts on the current state of the sector and its future.
Overall the mood of the conference was generally positive and optimistic with Keith Barr, CEO of IHG Hotels proclaiming in his opening interview that “we know the demand for travel is there - it’s freedom to travel is the issue.” However he also issued a warning shot to the sector stating that “consumers might not come for a second time if their stay is not perfect.”
Ben Harper, Managing Director of Watergate Bay Hotel (and Another Place, The Lake) echoed these sentiments stating that “the popularity in domestic travel shows people will still travel.” Economist John Ashcroft concurred - “travel will recover much faster than anyone thinks” and “there will be a huge surge in growth by Easter next year” although he acknowledged that unemployment numbers are likely to hit three million by the end of the year and that leisure and accommodation has been one of the hardest hit sectors of the pandemic.
A key theme throughout the event confirmed what a lot of the delegates already knew - that hotels in coastal and rural areas have benefitted at the expense of urban areas with London being the worst hit due to the lack of corporate business, group travel and international visitors. However, although the next six months are very uncertain, investors said that hotels still represent a positive opportunity due to the level of rich data not available from any other sector and the fundamentals remaining strong. London has always bounced back and well located assets will still thrive.
We heard that currently China has the highest accommodation occupancy levels globally (back to 2019 levels in the last two weeks) followed by the US then Europe – the majority of the world’s occupancy levels are less than 50%.
Another key theme was that currently, demand for accommodation is mostly at the weekends driven by domestic leisure with short booking windows. In terms of the corporate market - with the shrinking of office space - hotels are undoubtedly playing more of a role for the local community with home workers using bedrooms as a working space and scattered teams needing places to meet. Looking ahead, there is likely to be fewer long business trips with budgets spent on connecting people instead - hotels should capitalise on this and the increase in ‘bleisure’.
In terms of staff and training, a departmental approach to running a hotel may also be in the past. Hospitality staff have had to become multi skilled e.g. sales people have helped to serve breakfast using the opportunity to have direct contact with clients.
The sector is also poised for the fallout from business interruption insurance cases and Brexit and currently questioning levels of brand investment if increased leisure business means increased use of OTAs.
Visit Kent was a sponsor at the event and has published a two year study that explores the supply and demand for new hotel accommodation across the county. An Executive Summary and further details about the study are available to view here.