Get the latest hospitality news and inspiration straight to your inbox. Subscribe to our newsletter.

2016 predictions part one: What next year has in store for hotels

2016 predictions part one: What next year has in store for hotels

In the first of our week-long series of predictions for 2016, consultant Melvin Gold considers what next year will have in store for the hotel market
 
In many ways 2016 holds the promise of many similarities to 2015, but better. There are reasons that it may not turn out that way but at this stage my proverbial half-full glass is positively overflowing.

The trading and transactional markets both look to have a continuing positive trend, especially if all the investment that seems to want to find its way into UK hotels can find enough transactions to invest in! Trading continues to look positive, with upside especially outside London. I expect more emphasis on average room rate growth this year, given that occupancy levels are already at maximum achievable levels in many markets.

Big events are often a spur for boosting hotel performance and many hoteliers in host cities of the 2015 Rugby World Cup will have a challenge to match performance during that competition. We will look to royalty in 2016 with the Queen’s 90th birthday celebrations providing a boost to Windsor and environs in May and to London in June, and hopefully to the whole country as the UK’s pomp and pageantry hits TV screens worldwide.

The big ‘known unknown’ for 2016 is the impact of the introduction of the National Living Wage in April. Whilst this will certainly have an impact on profits in many cases, industry opinion is somewhat divided. It could be the subject of an article in its own right but there are many positives, especially the levelling of the recruitment playing field with other industries. Perhaps it will make the recruitment challenges for hotels easier?

The ‘unknown unknown’ is the impact of politics – especially geopolitics and terrorism – and economics on the sector. This can certainly not be assumed but it equally cannot be ignored and that is the main downside risk.

The optimist in me is dominant at present and I believe 2016 is likely to be a strong year for UK hotels.

Start the discussion

Sign in to comment or register new account

Start the working day with

The Caterer’s free breakfast briefing email

Sign up now for:

  • The latest exclusives from across the industry
  • Innovations, new openings, business news and practical advice
  • The latest product innovations and supplier offers
Sign up for free