Manchester Hotel Conference, 12-13 October 2016

1 November 2016

Last month, Fladgate partners James Fry and Eddie Powell attended the 13th Annual Hotel Conference held at the Hilton Deansgate Hotel in Manchester, to learn more about the latest issues affecting the hotel industry as well as catching up with clients and industry contacts.

CBRE gave a fast-paced and informative round up of UK hotel performance over the last 12 months. Interestingly, the key benchmark sector indicator of RevPar varied significantly across the country with Birmingham being the star performer and Aberdeen the worst (largely due to its exposure to the struggling oil and gas industry).  London’s RevPar and occupancy have both decreased in comparison to 2015 with analysts pointing to a number of factors, including a significant decrease in the number of US tourists travelling abroad during a US election year.

Professor Trevor Williams from the University of Derby provided an interesting economic overview.  Amongst some of the themes he explored was the potential significant impact on UK hospitality if the proposed plans drastically to reduce the number of unskilled migrants comes into force. Brexit (and in particular, sterling’s current weakness), Williams said, would be “good news” as it will be cheaper for inbound tourists to visit the UK and that “staycations” may increase for locals. However, the stemming of immigration is likely to have cost implications as a result of increased wages in the unskilled sector. The fall in sterling could also lead to an increase in prices of imported goods (or goods which require imported raw materials or components) as suppliers seek to pass through their inflated cost bases.

The continuing threat to the hotel sector of Airbnb as well as the commanding presence of online travel agents also dominated the panel sessions over the course of the conference. This led to several references to millennials, their consumer habits, preferences and behaviours. In a presentation from BDRC, the audience was informed that millennials have little interest in hotel brands but are guided by “user generated content” in their purchasing decisions. Several panel speakers noted that while the current trends in the hospitality industry were first displayed by millennials, these habits and behaviours are now being adopted by other demographics and the industry must continue to adapt and respond.

In short, interesting times ahead in an ever changing and evolving industry and who would have predicted 12 months ago that a well-known US hotel developer and investor (with two golf resort hotels in Scotland in his portfolio) would now be US president-elect!

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James Fry
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