In conclusion, it will comment on short-term and long- term investment as well as recommending an outcome for the investor. The UK Hotel Sector The current position A hotel, according to the ELI, is defined as ‘a collective accommodation establishment, typified as being arranged in rooms exceeding a nationally specified minimum and as providing common services, Including room service’. Generally, the UK definition is made according to the holding off license to sell liquor. (Lawson, 1998) According to the latest preliminary figures from the Watchmakers Survey by
Dolomite, the LIKE hotel industry has proven to be the strongest performer in Europe In the first six months of 2004, with revenue per available room (repay) rising 1 1 percent against the same period in 2003, resulting from a balanced mix of rising occupancies and average room rates. London, which is the leading performer in the I. J, experienced a 6% Increase In average room rate year on year. The key players The UK hotel industry is made up of several key players, including: * Boutique Hotels * Mid-range Hotels * Budget Hotels * Bed and Breakfast roving an exceptional and personalized level accommodation, services and facilities.
Mid-range Hotel is a standard room with added facilities, commonly classified with 3 or 4 stars. Budget Hotel is on the whole purpose-built, branded accommodation unit with a minimum of 50 rooms and standard low prices. Individual units are often known as lodges, inns or – less commonly now – motels. Bed and Breakfast is a private residence, several rooms of which are set aside for overnight guests whose paid accommodations include breakfast. (The American Heritage Dictionary of the English Language)
The competitive environment There is always strong competition among the key players within the UK Hotel Industry: From the Smith Travel Research where the grand demand for the Residence Inn was at 30% and the supply was only at 8%. The Marriott PL has developed a new category called “Residence Inn” to adapt this large market demand. I-J middle market hotel brand, Thistle, is launching a luxury global sister – Gunman, which is set to spread globally.
In order to grow the brand Thistle intends to upgrade some existing properties in the UK and launch an “ambitious acquisition strategy” broad. Whitehead has made the decision to reduce their exposure to (and ultimately exit from) the full-service hotels sector where they are the I-J operators of the Marriott brand, due to the low returns from this franchised business. The company also acquired Premier Lodge from Spirit Group for IEEE million, and combining Travel Inn and Premier Lodge and marketing them to the I-J consumer under on brand.
Hilton International has outlined an aggressive e-commerce strategy since 2002 to build a series of Web sites for its largest markets including the I-J, Germany, and Japan. The effort resulted in the creation of eight localized Web Sites representing seven different languages. Environmental Analysis The main external factors affecting the hotel industry, both now and in the future, are listed below: Political Disability Discrimination Act – came into force in 2004 meaning that service providers and businesses must take reasonable steps to allow for disabled access.
This particularly effects small business and may have some serious implications for the leisure and tourism industries. Migrant workers – As more countries Joint the ELI, workers from the new countries loud help ease staff shortages. Economic Olympic – London has won the competition to host the 2012 Olympic Games, which will boost tourism revenues owing to increased visitor numbers. London hoteliers have agreed to provide 40,000 affordable rooms for London 2012.
Euro – Following the government indecision on the Euro, hotels are split on their opinions or Joining the single currency, 52% of hoteliers were against adopting Euro. Interest Rates – were at a 40-year low during 2003; however, the Bank of England has slowly increased the rates in order to curb high levels of consumer debt. In May 2004 interest rates rose to 4. 25%, the third rise over the last seven months. Social The domestic holiday market – The rate has increased in 2003 and 2004, due to apprehensions about traveling abroad during the Iraq War and the natural disasters.
Growth in total expenditure has continued to rise by 16% between 2000 and 2004 but basically only in nominal (not adjusted for inflation) terms. (Detail to see Appendix- Domestic holidays and expenditure by I-J residents, 2000-05) Significant growth in key socio-economic groups – There has been a significant shift veer the last few years towards the higher socio-economic groups, suggesting a better-educated and more affluent population, already backed up by rising levels of disposable income which is an advantage to the hotel industry.
Technology The development of various technologies over the last decade has had a significant effect on the way hotels are booked, as well as the facilities that are provided within hotels, such as broadband Internet and digital TV. According to the Minted Report, internet penetration appears to be far from slowing, reaching 57% of the UK population in April 2004, with broadband and interactive digital TV having both online booking systems as well as providing Internet access within their hotels.
