Feature: Hotel Groups in the UK
Chain REACTION
INNOVATIONS and interesting design-led properties may be coming from independent hotel companies, but chain branded hotels are still the dominant force in the UK. “They continue to grow market share quicker
than other properties and they hold the lion’s share – 42 per cent – of recognisable supply; and they will probably represent 60 per cent within 20 years,” says consultant to the hotel industry Melvin Gold. There are good reasons for this. The major players now have nine or more brands and this answers to all corporate requirements, from five-star luxury to budget, including designer style properties and serviced apartments. “Consumers are getting more comfortable with the need to use brands and corporates prefer to sign contracts with companies that have significant brand presence in a particular country,” says Gold. In addition, it allows organisations to negotiate on the basis of aggregate spend. “Some hotel companies are particularly good at looking at us as a regional or global entity. We might have 5,000 room nights in one area and only 500 in another but they will see us as a customer overall,” says director of global travel service for Serco Group, Margaret Birse. “A few years ago, they would not have considered that.” The marketing clout and buying power of
Macdonald Hotels & Resorts' Randolph Hotel, Oxford
the large hotel groups also has appeal for independent hoteliers, who struggle to survive alone: in January this year, Focus Hotels re-branded ten properties as Mercure, Accor’s three- and four-star product.
“Some of our relatively new franchisees believe they are faring better in the economic downturn than they would as an independent hotel operator”
With the boutique hotel sector muscling in, branded hotel groups across the UK are fi ghting back by investing and innovating in a bid to stay on top. Catherine Chetwynd fi nds out more
Accor has been canny in its recognition of the potential of this market and has also brought All Seasons to the UK, an 'economy' entrant based on the same principle. The model does well for Choice hoteliers too.
“Our franchised hotels are outperforming the market against key metrics such as ADR, occupancy and RevPAR,” says UK director of sales Brian Garvan. “Anecdotally, some of our relatively new franchisees believe they are faring better in the economic downturn than they would as an independent hotel operator,” says Garvan, which suggests a vote for brand visibility. Given that all hotel companies have had a tough time, the chains may have fared better than most. “They have adapted their pricing to keep occupancy levels high and limit the potential negative impact of the recession,” says head of contracting UK & Ireland for HRS, Sandra Deregoski. “This is due to the increase
in centralised distribution systems, which enable hotel
chains to react more quickly to changes in the business travel market, so they have been decreasing rates to increase bookings,” she explains. “As the industry has become more competitive, hotel chains are increasingly relying on tactical, price-driven promotions in order to stand out from the crowd. Early bookers are rewarded with excellent rates.” Against all the odds, London held up out- standingly well, leading to the conclusion that location defined recession as much as brand, since hotels in some regions are still having a
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