South east hotel investment volumes break £1bn in 2018

Investment into south east hotels reached £1.36bn in 2018, a 39% increase on full year 2017 volumes according to international real estate advisor Savills.

The group said the market was “dominated” by portfolio transactions, however, domestic appetite for individual hotel assets remained a “key character of the region”.

The south east was the most active market outside of London, accounting for 20% of the total investment into UK hotels, behind the capital’s 39% share. The north recorded a 17% slice, Scotland 14% and the south west 10%.

Key deals in the region included Aberdeen Standard’s £40m sale of the 297 bedroom Travelodge at Heathrow Terminal 5 to Sidra Capital, and Principal Hotels £24m sale of the 140-bedroom De Vere Theobalds Estate, Waltham Cross to Aprirose.

Investment into south east hotels was made up of 39 individual assets and components of 15 portfolios. In total, 70% (£957m) of investment volumes were accounted for by hotels included in portfolio transactions.

Individual deals also accounted for £403m of investment, with the average lot size being approximately £13m. Additionally, domestic money dominated the single asset market, with UK investors accounting for 76% of individual transaction volumes.

Georgie Liggins, associate in the hotels team at Savills, said: “The south east continues to attract the lion’s share of investment outside of London. Appetite from visitors is driven by its diverse range of attractions from the beaches of Brighton and Norfolk to the historic market towns of Canterbury and Chichester.”

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Easyhotel opens latest property in Ipswich

Super-budget hotel chain Easyhotel has opened its latest hotel in Ipswich, featuring 94 rooms.

Easyhotels said they chose the location as Ipswich is “rapidly becoming a stylish technology hub” with more than 100 technology start-ups have made their home in the town and the Waterfront area.

St John Harvey, chief cultural historian at easyHotel, said: “Alongside its cosmopolitan culture, Ipswich really is a cradle of British innovation and inventiveness. Not many people know that the world’s first commercially marketed powered lawnmower was built by Ransomes in Ipswich in 1902.

“But it’s not all about lawn mowing. The plough, the iron bridge, the fried clam, a fully hydraulic auger for winemakers and fruit growers, a test that has drastically reduced the number of diabetics suffering heel ulcers at the town’s hospital and the HI Kayak rescue method were all invented in the town.”

Commenting on the design of the hotel Easyhotel said they have brought a “sort of upgraded seventies minimalist chic” to the rooms.

St John Harvey added: “Stylish, simple rooms, our signature orange colour, integrated en suites and simple, convenient touches such as integrated bedside USB charging points.”

EasyHotel’s currently owns 11 hotels comprising of 1,219 rooms and has a further 24 franchised hotels with 2,039 rooms. Alongside Ipswich the hotels are located in Liverpool, Birmingham, Leeds, Sheffield, Manchester, Reading and London.

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Hotel Concept of the Month: Dimpsey

Slightly different to the usual designs featured in this section, Dimpsey is a five-star luxury retreat and is described as an “all-in experience helping busy people to get some quality time together”. The glamping-style hut aims to leave its guests feeling “rejuvenated, relaxed and reconnected”.

The unique concept is run by couple Emma and Andrew Warren and is located on their small farm – shared with cows, sheep, a few chickens and a goose named George – on the Blackdown Hills in Somerset. It has been the winner of the Small Business Sunday award as well as picking up gold in the Glamping Business of the Year category at the Tourism Awards for Bath, Bristol and Somerset towards the end of 2016.

Speaking about the the concept, Emma comments: “The idea of the glamping experience is to chill out and reconnect with each other, and we have geared everything around making that happen – so from relaxing music to snuggly beds, hearing the owls hoot at night and watching the animals during the day, we’ve totally got chill out covered.”

The 18-foot long hut features a double bed, seating, kitchen area and a bathroom with a shower and flushing toilet. Designed and kitted out to feel like a luxury hotel, Emma and Andrew have ensured that all of its styles are from British designers. Other features include a hot tub, garden oven, logs for the log burner and fire pit, as well as welcome tray and eggs, bacon, butter, milk and bread for breakfast.

Despite its relatively small appearance, the owners of Dimpsey say that it always surprises people with the spaces that it offers. “We wanted the ability to have bunk beds with the top bed folding away and being unobtrusive when not in use – as well as a concealed ladder,” says Emma. The top bed fits perfectly against the wall when not in use and the ladder can be tucked away in a wall slot.

Meanwhile, the bottom bunk is a daybed and has space underneath for storage baskets, while a number of cubby holes are recessed into the wall with power sockets hidden in them. Also featured is a ‘wall bed’, which folds down out of the wall fully made. During the day the space is a bench and tables and then at night the table drops and the bed folds down.

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Why direct bookings matter

When it comes to direct bookings, there are two key customer streams; existing customers who are returning to you and new customers visiting for the first time. These two audiences have to be tackled in different ways.

Building loyalty with existing customers

I recently did an exercise with a client looking at their bookings over the last three years; one statistic in particular stuck with me. The business has a lot of corporate custom, and each year, approximately 35-40% of their total sales are from repeat guests; even though this represents over a third of the business, of these repeat customers, only 41% book direct with the hotel, the rest rebooking through third-party providers. This repeat custom was therefore costing the business more than £15,000 per year in commission fees alone – a total and unnecessary waste of money! Speaking specifically with a cross-section of these guests, common reasons for using booking engines include ease, and difficulty remembering the hotel’s name.

This statistic is powerful and although I hesitate to do mid-year performance analysis, the initial changes that we made to marketing are already having an impact on commission. For the first six months of the year, average monthly commission is down from £1,250 to £690, and the direct bookings have increased from 41% of repeat customers to 59% – a whopping increase for the business. Achieving this improvement has been done in three ways:

  1. Specifically asking guests to rebook direct and rewarding them for doing so. By reducing the amount lost through commission, we have been able to increase the value of each individual booking to the business. This means there is money in the budget to reward them for their loyalty, and incentives such as wine with dinner, and vouchers for the gin bar have both proved popular.
  2. Contacting the business as well as the individual. By cherry-picking businesses that place fairly regular but inconsistent bookings, we have been able to reward businesses with loyalty rates and in one or two cases, have even worked with the business to provide hotel stays as employee perks. Not all of the businesses have been receptive, due to challenges with procurement processes, but it has been effective enough to warrant doing.
  3. Communicating regularly. You’ll be surprised how few hotels communicate specifically and regularly with their repeat guests.  They may do an emailer to the entire database, but not to this specific segment. By sending regular reminders, offers, updates and even a targeted promotional item, customers are starting to make more direct bookings and less booking engine ones.
  4. The perk is that these customers are already on your database, and there is no need at all for them to use booking engines. This means where your website ranks and performance have a limited impact and you can make small but mighty changes to your revenue, quickly and simply.

Gaining new customers

Gaining new customers is more of a challenge and you will find it difficult to get your own website, with its several thousand visitors, to rank anywhere close to the booking engines who have hundreds of thousands of visitors and much bigger marketing budgets. That doesn’t however mean it is a lost cause, but you do have to be committed to pursuing this custom and understand the impact will be more long-term. You can either use booking engines to drive your new custom, with a top-quality loyalty programme running behind it, and / or invest time and energy into pursuing direct bookings yourself, which will take longer to offset the commission costs, but will have significant long-term benefits.

You need to accept you won’t exceed the rankings of the booking engines, but you can be high enough up the list to attract attention from anyone searching. Your focus needs to be on using available digital platforms to drive awareness and rankings. Search engine rankings are not an exact science, but you can influence rankings quite easily with some of the following tricks:

Keyword your site well – think about what someone will be searching for, and make sure you have a page about it. For example, if people might search “Hotels Oxford Town Centre” then make sure you have a page that talks about your hotel in Oxford Town Centre.

Start a blog – blogs, populated with keywords are a great way to improve rankings; a) they provide space for you to add more keywords, b) they keep the site current and c) they give you scope to link your business to others in the area. For example, writing a blog about guests visiting the Eden Project Bulb Mania will help you appear on the list when someone searches for hotels near the Eden Project (if you are actually nearby of course).

Encourage reviews and PR – getting external sites linking to yours makes it more relevant. Inviting journalists to visit and review, encouraging bloggers to come along, using review sites, all link back to your website and help improve ranking.

Drive traffic via social media and email – don’t forget your own platforms; sharing visual posts and interesting information via social media and email encourages visitors to the site which helps maintain and improve rankings.

Direct bookings can be hugely lucrative, certainly more so than booking engines, but whatever you do, you need to be consistent,  specific, analyse the results and expect gradual changes over time.

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Premier Inn owner sees total sales up for third quarter

Whitbread, the owner of Premier Inn, has reported total sales growth of 2.5% for the hotel brand in its Q3 trade report.

The UK business achieved a total accommodation sales growth of 3.5% in the third quarter, which group said reflected a “strong central London market and a weak regional market”.

Additionally, over 2,000 new rooms have been added in FY19 so far, and the group said “occupancy remained” high at over 80%.

Whitbread said it is now a “focused hotel business”, with over 800 hotels in the UK, Germany and the Middle East operating under the Premier Inn brand, and a “committed pipeline of over 20,000 additional rooms”.

Whitbread CEO Alison Brittain said: “We are cautious about the macro environment for the next financial year due to increased uncertainty and continuing high inflation. Although we are confident in our ability to create value from ongoing investment in the UK and increasing investment in international growth, in this environment we expect underlying profit before tax in FY20 to be consistent with this year.”

She added: “Our unique model and leading market position in the UK puts us in a strong position to capture structural growth opportunities in the UK and internationally.

“Investing in growth through our disciplined approach to capital allocation ensures we can create sustainable value for shareholders over the longer-term. We look forward to presenting this in further detail at our Capital Markets Day.”

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UK hotel market to continue growth in 2019 according to Chrisite & Co

Despite “growing operational costs” and “concerns over staff recruitment in post-Brexit Britain”, the UK hotel market showed “encouraging signs of growth” in 2018 which looks set to continue in 2019, according to the latest annual report by Christie & Co.

The report, ‘Business Outlook 2019: Navigate, Innovate, Accelerate’ forecast that RevPAR growth in both London and the UK regions would be steady, with growth of +0.6% and +0.7% in London and the regions respectively, between 2018 and 2019. Supply was also found to show healthy increases, with many of the major British cities such as Manchester, Belfast and Edinburgh seeing “strong” pipelines in the year ahead.

The report also found international investment continued to be a key driver, with Christie & Co identifying capital from across the globe, particularly from European investors making up more than 50% of UK investment in 2018. Average prices also remained economically positive throughout 2018 with hotels seeing a 4% increase.

Brexit was identified as a “pivotal factor” for businesses within the hospitality sector in the UK, which employs around 400,000 EU migrant workers, and Christie & Co said any changes to immigration policies “could have a notable impact”.

Looking to the year ahead, the report outlined Christie & Co’s market predictions; flat or negative profit growth for some operators due to higher costs, a potential increase in distressed positions in the second half of 2019, and new developments in technology being implemented to improve customer service and productivity.

Barrie Williams, managing director – hospitality at Christie & Co said: “The UK hotel market remains an attractive investment proposition and appeals to a wide range of buyers. Christie & Co continue to see many opportunities for value creation in the hotel market and across brokerage, valuation and consultancy, we are well placed to provide all types of investors with advice.”

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Top trends in hospitality for 2019

Accounting for over 10% of global GDP and the creation of one in five new jobs according to the World Travel and Tourism Council, travel and tourism continues to be one of the world’s fastest-growing industries. It is also an industry undergoing rapid transformation, shaped by new technologies and the values and needs of an increasingly diverse range of travellers.

Emerging trends in sustainability, luxury, technology and innovation are all influencing the future direction of the hospitality industry. As worldwide hospitality education leaders, our responsibility is to provide aspiring hospitality professionals with the skills and knowledge they need, and to develop the next generation of leaders for the hospitality industry. Monitoring industry trends and adapting our education programmes accordingly is essential for us to ensure that our curricula are relevant for the industry and our students. With this in mind, these are some of the top trends to watch for in 2019:

Entrepreneurship and innovation

The hospitality industry continues to provide fertile ground for aspiring entrepreneurs, while innovation will be key for established brands to stay relevant and compete with new players.

Innovation strategies should also cater to the different profiles, needs and expectations of travellers. For example, the importance of social experiences to Millennials and Gen Z travellers has given rise to a new breed of urban boutique hotels offering social spaces and activities – sometimes at the expense of individual room size, as evidenced by the success of micro-hotels. Busy business travellers, meanwhile, are most likely to appreciate innovations in technology that enable them to save time.

But to entice luxury travellers, retaining the human touch will be key for hotels to deliver a bespoke experience. Understanding the different needs of guests is essential for brands to develop innovative concepts capable of yielding long-term profit and business growth.

New technologies in hospitality

Thanks to new technologies, hospitality businesses can provide guests with greater customisation, convenience and control. Technology is also transforming the way customers interact with brands – even before and after their stay.

Chatbots, robots and other forms of artificial intelligence provide users with information on-demand and personalised recommendations. Facial recognition technology is opening doors (sometimes literally) to time-saving service, while smart hotel rooms equipped with internet-of-things connectivity allow guests to customise their experience with an app or their own voice. Loyalty programmes based on blockchain and cryptocurrency are also creating interesting new opportunities for brands to engage with customers.

While these examples provide a glimpse of current and future applications of technology to the guest experience, many of these technologies are still in their early stages, with the potential to change the industry in ways we have yet to imagine.

Luxury brand management and guest experience

Balancing heritage with innovation is essential for luxury brands to attract an increasingly diverse range of clients. Relying on brand history alone is no longer enough – brands need to bring their identity into the future in order to stay relevant. However, storytelling is still key for brands to convey their value to customers.

Global brands will need to reflect the increasingly diverse identity of their clients through multicultural awareness and sensitivity. To meet omnichannel customers, brands will need to build seamless transitions between offline and online experiences while retaining the high levels of service that luxury clients expect.

We can also expect to see more luxury brands branching into hotels and other hospitality ventures – adopting the codes of hospitality enables brands to provide customers with a uniquely immersive experience that goes beyond traditional retail. Finally, retaining the human touch throughout these interactions will be essential for luxury brands to nurture the personal relationships that build client loyalty.

Sustainable hospitality

The United Nations have pushed issues of sustainability to the forefront of public awareness, and conscientious Millennials and Gen Z travellers in particular expect global hospitality businesses to take a more comprehensive approach to corporate social responsibility.

Transparency and accountability are becoming more important as travellers want to know the impact of their footprint – not only environmentally, but socially as well. Sustainable and socially responsible strategies now range from the reduction of single-use plastics to the development of social business concepts and the shift towards a circular economy system, in which resources are recycled and regenerated, rather than used once and disposed.

Food and beverage innovations

Sustainability concerns have also become important within the realm of food and beverage. Interest in locally sourced, seasonal food and vegetable-centric cuisine continues to grow among eco-friendly and health-conscious consumers, resulting in the development of farm-to-table – and even seed-to-table – culinary concepts.

However, the pursuit of pleasure is also a key motivator for customers seeking new culinary experiences that delight the senses. Millennials are driving a shift towards the democratisation of dining, blurring the boundaries between formal and casual, and embracing high-quality cuisine at an accessible price point.

Street food and open-fire cooking are introducing diners to a wider range of flavours, traditions and experiences. And in the age of Instagram, visual delights are just as important as deliciousness – something which some of the world’s top pâtissiers already know.

As these trends reveal, the future of hospitality is increasingly transversal, shaping and being shaped by global movements, industries and consumer values. Despite these rapid changes, among consumer-centric industries such as luxury and hospitality, one constant remains: the importance of the human touch. Human relations continue to play an invaluable role in the delivery of memorable experiences and service, making human talent one of our greatest sources of innovation.

By Benoît-Etienne Domenget, who serves as CEO of Sommet Education, a group encompassing the prestigious Swiss hospitality management schools Glion Institute of Higher Education and Les Roches Global Hospitality Education. A graduate of HEC Paris, Mr Domenget is a seasoned hospitality professional and has held positions as Senior Vice-President Development EMEA and Managing Director Switzerland with AccorHotels.

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Corse Lawn House appoints youngest head chef in hotel’s history

Corse Lawn House has announced the appointment of Chris Monk as its new head chef – the youngest head chef in the hotel’s history.

Monk will re-join the family-run team at Corse Lawn House after having trained at the hotel as a teenager. Within his new role, Monk will lead all culinary operations, managing the hotel’s signature Anglo-French menus and array of fresh produce.

He has previously worked at the two Michelin starred Le Champignon Sauvage and renowned Hampshire Michelin starred restaurant, The Montagu Arms Hotel at Beaulieu. In recent months, Monk has been working alongside Corse Lawn House’s owner and proprietor, Baba Hine to learn the ropes of the role before taking the lead as head chef from January 2019.

Monk said: “It is such an honour to be taking my first head chef role at Corse Lawn House. The hotel has always had fond memories for me. I look forward to putting my own stamp on the kitchen whilst keeping the core values it has always held, cooking everything fresh, from the brioche for breakfast, the scones for afternoon teas to the petit fours, everything is made in house and using local, seasonal produce. We even use all game from within a 10-mile radius, that is really exciting.”

Hine added: “We are delighted to welcome back Chris as a core member of our hotel team here at Corse Lawn House. Chris is a delightful young man and his passion for food comes through on the plate. He is a fantastic asset to our team – extremely driven, whilst wonderfully calm, and prepared to put in a huge amount of work.

“Chris has been doing a terrific job so far and our guests are relishing his menus. It’s no mean feat taking on a kitchen with such standing, yet I have absolute confidence in Chris and we are all excited to watch him flourish.”

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Holiday Inn Express Bridgwater appoints Barnaby Kean as GM

Holiday Inn Express Bridgwater has appointed Barnaby Kean as its general manager ahead of the hotel’s spring 2019 opening.

He will lead the team at the new 138-bedroom hotel, which is operated by the UK independent hotel management company, RBH.

According to the hotel brand, Kean has had a varied background within the industry, honing his expertise as a sous chef, head chef and operations manager, before taking on his most recent role as hotel manager at Holiday Inn London – Regent’s Park.

Kean said: “I am eager to kick off this new chapter of my career, and am looking forward to leading the team through the opening of what promises to be a fantastic new hotel in the local area. The building progress is going as planned and we are excited to see the finished result.

“We hope to attract a variety of customers into the hotel, which we are confident will prove to be the perfect business venue with fantastic meetings and conference facilities and a warm, welcoming team.”

Holiday Inn Express Bridgwater is set to be the biggest hotel in the area, located in the Regional Rural Business Centre on the outskirts of the Somerset town. The hotel will offer a spacious bar and restaurant area, alongside two meeting rooms and an on-site car park.

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Hotels defy consumer spending decline in December

Consumer spending continued to fall in the month of December with a 1% decline, however hotels managed to defy the trend – with spending having increased by 7.6%.

This is according to Visa’s UK Consumer Spending Index, which showed that overall expenditure declined 1% year-on-year in December – the fastest decline seen since April.

However hotels and restaurants outperformed other UK sectors in December, and experienced the joint-quickest rate of increase in the past 20 months.  

For the whole of 2018 Visa’s index found expenditure has fallen in eight months of the year, underscoring “a relatively weak overall picture of household spending”. Lower expenditure was largely driven by a disappointing performance by the high street, as ‘face-to-face’ spending fell -1.6% on an annual basis in December.

Visa also found that online spending remained “relatively subdued”, with expenditure rising by just 0.5% year-on-year.

Adolfo Laurenti, European principal economist at Visa, said: “The further decline in UK consumer spending in December 2018 is a disappointment, but not a surprise. Notwithstanding a backdrop of low unemployment and rising wages, households remained very cautious at the end of the year – as they were for most of 2018.

“An acceleration in spending at hotels, restaurants and bars (+7.6% year-on-year) suggests that some categories of discretionary spending are holding up better than the market as a whole. And the modest pickup in ecommerce point to the resilience of digital channels of distribution, a favorable long-term trend that recent woes have not derailed.”

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A recent survey from hotel solutions provider HRS has found that the demand for innovative technology in hotels is on the rise


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