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Executive Summary

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EXECUTIVE SUMMARY

The UK hotels sector operates as part of the wider service sector and generated sales of £7.61bn in 1998, an increase of 24.9 percent on 1994. The grading system applied to hotels varies considerably. The sector itself tends to classify properties into four- or five-star, mid-market or budget hotels. However, the market can also be viewed in terms of two sectors based on two broad classifications of clientele:

* corporate
* consumer.

Sales to corporate clients account for by far the largest market share. They include not only bedroom, food and beverage sales, but also other facilities for meetings, conferences and seminars. Corporate spending budgets for travel and accommodation have risen with the end of the recession and hotel groups regard this market as particularly desirable, targeting sales through tailored packages and reward schemes. The consumer market has also seen rising sales. The short break market has seen rapid development, with many consumers choosing to supplement their main holiday with this type of package. In addition, deals are being developed for the `grey' market, i.e. the over-50s, and packages such as theme weekends are also boosting revenue.
The number of hotel businesses in the UK continues to fall. To some degree this has been due to failing enterprises. However, the sector has also been undergoing structural changes, with the larger groups expanding through new building or acquisition. The latter activity requires the subsequent removal of hotels to reduce competition between hotels within the group. Recent acquisitions have included Bass's takeover of the Inter-Continental Group and Hilton Group PLC's purchase of Stakis PLC and its hotels in 1999. Smaller hotel groups and independents have come under increasing pressure as a result of competition from the major groups which can support and promote their brands.
A number of companies are consolidating their position in the four-star sector by upgrading their portfolios. It is widely believed that at present the greatest threat is to the three-star sector, which could be badly affected in the case of an economic downturn. Three-star chains themselves are brand building to consolidate and strengthen their position. However, the most rapid development continues to be in the budget hotels sector, where groups such as Travel Lodge, Travel Inn and Premier Lodges are expanding their property portfolios rapidly.
The outlook for the UK hotel sector remains positive and Key Note forecasts that the value of the market will be £8.1bn in 1999, and rise to £9.82bn by 2003. Occupancy rates have shown little change since 1997, but room rates are rising, boosting revenues. The hosting of events such as the Cricket and Rugby World Cups and the impact of the Millennium celebrations are positive indicators for strong performance in the medium term.

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TABLE OF CONTENTS

Executive Summary

Market Definition

MARKET SECTORS

HOTEL AND GUEST ACCOMMODATION CLASSIFICATION

MARKET POSITION

MARKET TRENDS

Table 1: The UK Hotel Market by Sector by Value (£m and percent), 1998

Table 2: Index of Hotel Turnover, Consumer Expenditure and Gross Domestic Product at Current Prices (Index 1994=100), 1994-1998

Table 3: Tourist Expenditure in the UK, (£m) 1994-1998

Market Size

THE TOTAL MARKET

BY MARKET SECTOR

Table 4: The UK Hotel Market by Value at Current Prices (£m), 1994-1998

Table 5: The UK Hotel Corporate Sector by Clientele Type by Value (£m and percent), 1998

Table 6: Tourist Expenditure in the UK by Share ( percent), 1998

Table 7: The UK Hotel Consumer Sector by Clientele Type by Value (£m and percent), 1998

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

EMPLOYMENT

TRADE ASSOCIATIONS

Table 8: Number of UK Hotel Businesses, 1990 and 1994-1998

Table 9: Number of UK VAT-Registered Hotel Businesses by Turnover (number and percent), 1998

Table 10: Number of Employees in Hotels and Other Tourist Accommodation (000), as at 30th June 1994-1998

Brands

MARKET DEVELOPMENTS

BRAND TYPES

BRAND NAMES

BRAND ADVERTISING

Table 11: Selected Major UK Hotel Brands by Holding Company, 1999

Table 12: Selected Hotel Brands by Advertising Expenditure (£000), Year to March 1999

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 13: Major UK Hotel Groups by Number of Rooms, 1999

Table 14: Selected Major Companies in the UK Hotel Market by Turnover (£m), Years Ending 1997/1998/1999

Table 15: Selected Geographical Analysis of the Hotel Interests of Hilton Group PLC, Year to 31st December 1998

Table 16: Financial Performance of Bass Hotels and Resorts, Year to 30th September 1997 and 1998

Table 17: Financial Performance of Whitbread PLC Hotel Division, Year to February 1998 and 1999

Table 18: Average Revenue per Available Room per Night for Thistle Hotels PLC (£), 1997 and 1998

Table 19: Average Revenue per Available Room per Night for Millennium and Copthorne Hotels PLC (£), 1997 and 1998

Table 20: Main Media Advertising Expenditure on Hotels and Hotel Package Holidays (£m), 1998 and 1999

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

GENERAL TRENDS

THE CORPORATE CLIENT

GENERAL HOTEL CLIENTELE

Table 21: percentage of Adults in Great Britain Who Stayed at a Hotel in the Previous 12 Months, 1994, 1996 and 1998

Table 22: Business Visitors to Hotels by Sex, Age and Social Grade by Type of Stay ( percent), 1998

Table 23: All Visitors to Hotels by Sex, Age and Social Grade by Type of Stay ( percent), 1998

Outside Suppliers to the Industry

INTRODUCTION

SUPPLIERS OF GOODS

SUPPLIERS OF SERVICES

Current Issues

BUSINESS TOURISM

MINIMUM WAGE

GOVERNMENT TOURISM STRATEGY

CONSORTIA DEVELOPMENTS

CORPORATE ACTIVITY

Forecasts

FORECASTS 1999 TO 2003

MARKET SEGMENTATION

DEMOGRAPHICS

GLOBALISATION

PRODUCT DEVELOPMENT

COMPETITOR FORECASTS

Table 24: The Forecast UK Hotel Market by Value (£m), 1999-2003

Table 25: Age Profile of the UK Population (000), 1996 and 2006

Market Growth

Figure 1: The UK Hotel Market by Value (£m), 1994-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Company Financials

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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