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

14 December 2015
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 optimist in me is dominant at present and I believe 2016 is likely to be a strong year for UK hotels.

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