UK STR sector grows 16 times faster than hotels as travel priorities shift

RMS Cloud analyses ONS figures

The pressure is on for UK hotel operators as new data shows that short-term rental (STR) business have grown 16 times faster in the last decade, reflecting the changing priorities of travellers seeking experience-led accommodation.

According to the latest ONS figures analysed by Property Management Software (PMS) specialist RMS Cloud, the STR sector saw a 90.7% increase in the number of businesses, growing from 3,780 in 2013 to 7,219 in 2023 (or 3,430 new businesses).

In contrast, the number of hotel businesses grew by only 5.6% over the same period from 12,385 to 13,080 (a rise of 695 new hotel operators).

As staycations surge – with a third of Brits predicted to holiday in the UK this year, according to the Travelodge 2024 Travel Trend Report – travellers overwhelmingly chose environmentally friendly, experiential travel in accommodation that offered more space, privacy, and practical amenities. 

Out of the 382 UK local authorities, 260 saw an increase in short-term rental (STR) businesses, averaging 13.2 new businesses per region. 

In contrast, only 154 local authorities experienced growth in the hotel sector, with an average of just 4.6 new hotel operators per region. 

Additionally, UK campgrounds have seen a notable 35% rise in new sites from 2,495 in 2013 to 3,375 in 2023 (an increase of 880).

Zen Valli, managing director at RMS Cloud, said: “It’s well known within the hospitality industry that STR businesses have been gaining momentum over the last few years but many will be surprised at how significant that disparity is when compared to hotels.

“While this is fantastic news for the STR and campground sectors, the pressure is now on hotels to find a way of catering to the shifting demands of today’s travellers who are seeking more authentic experiences. 

"Whether that’s offering a more personalised, contactless service, or leaning towards the aparthotel approach where all guests have a kitchen and lounge area for a more ‘home from home’ experience, hotels will be urgently looking to gain more of the market share.”