Hotels & Motels in the UK Industry Market Research Report Now Updated by IBISWorld

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Over the past five years, poor economic conditions have hindered the overall performance of the Hotels and Motels industry but conditions should gradually strengthen over the coming five years through 2018-19. The recovering economy is expected to translate into higher room occupancy rates as both international and domestic tourist numbers increase and this will be supported by major sporting events to be held in the UK such as the Commonwealth Games and the Rugby World Cup.

IBISWorld industry market research
Not resting on laurels: Other big sporting events will support the industry after the Olympics

Over the past five years, poor economic conditions have hindered the overall performance of the Hotels and Motels industry. Household wealth and corporate profit levels have fallen across the country and the rest of the world, meaning business travel budgets were slashed and highly indebted consumers found it increasingly difficult to finance holidays. This reduced domestic and international hotel demand from both consumer and business markets in the three years through 2010-11. However, industry conditions improved markedly in 2011-12 and 2012-13 as the London Olympics and a generally weak pound boosted tourism activity. Other events including the Queen's Diamond Jubilee, Royal Wedding and Royal Baby have also helped put the United Kingdom on the tourist map, supporting demand for hotels. Growth is expected to slow again during 2013-14 as the industry suffers from a post-Olympic slowdown and a forecast stronger pound, with industry revenue falling by 3.0%. As a result of this, growth over the five years through 2013-14 is expected to be close to flat, with industry revenue estimated to grow at a compound annual rate of 0.5% to £15.5 billion.

According to IBISWorld industry analyst Steven Connell, “the industry is being transformed by the rise of online travel agents”. Websites like booking.com and expedia.com have come to dominate online accommodation booking in recent years, allowing independent hotels to target a wider customer base but also imposing commissions and pressuring profit margins in the process. An investigation by the Office for Fair Trading into possible price collusion between online travel agents and hotels, expected to be concluded in October 2014, could have major ramifications for the industry.

Conditions should gradually strengthen in the industry over the next five years through 2018-19. The recovering economy is expected to translate into higher room occupancy rates, increased international tourism, higher domestic tourist numbers and improved pricing levels in future years. Connell adds, “the industry will also be supported by major sporting events to be held in the UK such as the Commonwealth Games and the Rugby World Cup”.

IBISWorld estimates that the four largest players in the Hotels and Motels industry satisfy approximately 12.5% of the market in 2013-14. There is no one player with the scale to dominate the market. However, Whitbread, the largest company in the industry with its Premier Inn brand, has some influence on the prices and services offered in the budget branded hotel segment. Overall, the industry has a low concentration level and is highly fragmented, and this is likely to remain true in future years.

For more information on the Hotels & Motels industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.

IBISWorld industry Report Key Topics

The industry includes hotels and motels that provide accommodation services to UK residents and international guests. These establishments also have other facilities, including restaurants, recreational areas, conference rooms and convention centres, and offer laundry services and parking.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 7222 9898.

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Danielle Goodman
IBISWorld
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