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Guest Post: As competition intensifies, unique hotels have an advantage

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Guest Post: As competition intensifies, unique hotels have an advantage

By Krishan Kadodwala, director of market management, Expedia

For hoteliers across the country, it is important to send the message internationally that the UK is open for business in the wake of last year’s Brexit vote.

The decision may have driven uncertainty across the hotel and wider tourism sector but data from the Tourism Alliance suggests the weak pound is stimulating international travel and making the UK a more attractive tourist destination.

A weaker pound may also further encourage staycations among domestic holidaymakers. Our advice to hoteliers is; don’t just fill your hotel – fill it with the most valuable travellers.

At Expedia, we work hard to help our hotel partners tap into the markets that matter, for example American visitors present a tremendous opportunity for hoteliers, as they are the prized guests who generally book their trip further in advance, are much less likely to cancel, stay longer and spend more when here.

Looking at the London market specifically, by reacting rapidly following the Brexit vote and then throughout last summer, we promoted the capital as a destination of choice for Americans looking to grab a holiday bargain across the pond.

Over 7,000 rooms are expected to open in London in 2017 – about the same as Edinburgh, Manchester, Aberdeen, Belfast, Birmingham, Cambridge, Liverpool, Leeds, Glasgow and Bath combined

By targeting these valuable visitors through investment in various opt-in promotional campaigns, this helped hotels in the capital across our network finish 2016 strongly with year-on-year double digit growth in demand and average daily rates (ADRs) in positive growth.

There’s no doubt the London market in particular is highly competitive, with additional supply in the pipeline only set to increase competition.

PWC forecasts that over 7,000 rooms are expected to open in London in 2017 – about the same as Edinburgh, Manchester, Aberdeen, Belfast, Birmingham, Cambridge, Liverpool, Leeds, Glasgow and Bath combined. We’re seeing exciting new hotels pop up all across the city, and have partnered with many of them.

Complementary to that is a noticeable shift we’ve observed from west to east London in share of bookings. Following the London 2012 Olympics, there has been growing interest from travellers in this area of the capital, especially with exciting new supply coming on to the market, such as chains like citizenM promising ‘affordable luxury’.

These new breeds of hotels cater for the savvy Millennial travellers and offer something different in terms of design and technology with self-service kiosks and smartphone keyless room entry, a feature we at Expedia are testing via our mobile-booking app.

There’s a noticeable shift from west to east London in share of bookings

Travellers that might have previously booked four or five star hotels in west London are now looking at alternative locations. Hotels that have typically been reluctant to move on rates may have to look at their ADRs to compete based on this shifting consumer behaviour.

Guests increasingly want features that are integral to their overall hotel experience, such as booking of activities and ticket purchasing. With competition increasing from a growing number of alternative accommodation providers, hoteliers need to focus on providing experiences and services that these providers can’t offer.

With 2017 set to be another challenging year for the sector, our investment and innovation in technology that enables hoteliers to reach new markets and grow their business will prove a competitive advantage.

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