Aberdeen, Glasgow and Liverpool, with 900 or more rooms apiece. More recently, STR Global worked out
that, as of the end of December, there were 10,577 new rooms actually under construc- tion – as opposed to those at the planning stage or still on the drawing board – in the UK.
Last month, Buying Business Travel re- ported that Travelodge is set to invest £100 million in 15 UK hotel openings this year, bringing the brand’s total to 510 proper- ties and nearly 38,000 rooms. Travelodge is also eyeing a potential 150 new properties over the next eight years, creating more than 3,000 jobs. Whitbread-owned budget rival Premier Inn has long said it wants to reach 75,000 UK rooms – from 55,000 last year – by 2018. French group Accor, which currently boasts 200-plus UK and Ireland properties, has “a short-term target” of 300 hotels. “Overall, the general feeling is that supply is not currently an issue,” says PWC. “However, evidently in some areas too many hotels may exacerbate any demand weakness. We would expect the pace [of supply increases] to accelerate more steeply as economic growth takes hold and access to financing improves.”
PWC expects the number of rooms in London to grow by 5.3 per cent this year, while regional supply will creep up by only 1.7 per cent. With market equi- librium seemingly only a distant dream,
“While the supply side of hotel pricing policies is more or less fixed, there is plenty of scope for flexibility on the demand side”
it would appear to make sense to seek to adjust demand. Hospitality industry consultant Simon
Scarborough, a former manager of the 802- room Tower Thistle and general manager of the Flemings Hotel in London’s Mayfair, suggests travel buyers have work to do. “Hotel pricing policies are all about supply and demand, and while the supply side is more or less fixed, there is plenty of scope for flexibility on the demand side,” he suggests. “The wage bill for a business traveller on £50,000 a year is roughly £25 an hour, and while they might prefer to stay as close as possible to their ultimate destination, in terms of the total cost of a trip, that may not always make financial sense. Add the extra travel cost to the value of his or her time, and if the out-of-town
THE TMC VIEW… PAUL EAST, chief operating officer for UK/Europe and Americas, Wings Travel Management
CERTAIN CITIES DO APPEAR TO BE HAVING increased busy periods and some hotels seem to be reluctant to offer last-room availability because of this. We have made some modifications to clients’ hotel programmes to ensure they
76 BBT MARCH/APRIL 2015
manage to maximise on the savings.
For corporate travel, location remains a key factor – especially when visiting clients or sites. Some of our clients tried to stay further out, but increased travelling time and
costs did not bring an overall value saving. Third-party booking sites can be a great barometer for what rates are available – we use them to benchmark. In my opinion, you generally get consistency with brands
like Premier Inn, but our recommendation is that we assess room nights in a location and then look at the overall room nights across the UK to see if there is any value in trying to tie up with one brand.
BUYINGBUSINESSTRAVEL.COM
property still works out cheaper, the old ‘location, location, location’ argument falls flat on its face.” Scarborough may have a point. A rack-
rate room-only booking in mid-February for a March 2 overnight at the Premier Inn at Heathrow’s Terminal 5 would have cost £106. The same booking, for the Premier Inn London Ealing – which is flagged as being only 11 miles from Heathrow – would have cost £71.
ADVANCED-PURCHASE RATES Similarly, the published advanced- purchase rate for the Britannia Hotel Manchester, in the heart of the city, was £79. At the Britannia Ashley Hotel, 12 miles away in the village of Hale, the same deal was £49.50. Rates at the Travelodge in Slough start at £29 a night. The return rail trip to London Paddington takes around 30 minutes and costs less than £14. The Travelodge in Marylebone, within walking distance of Paddington, costs a minimum of £49 per night. And so it goes on. The travel buyer’s lot is not a happy one. Corporate travel demand is on the increase, and UK hoteliers with any sense are well aware of the fact. Room supply is not keeping pace with demand. Without an element of buyer creativity, corporate hotel bills are on an upward trajectory. Consolation, if such it is, is that there is unlikely to be much competition from the Greeks.
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