MANCHESTER, England — It was a little difficult to gauge what attendees at the Annual Hotel Conference were thinking as the conference concluded its first day.
The general notion was hoteliers should not be pessimistic, and that the recession, if it comes, will not be so bad.
Elsewhere in the United Kingdom, political leaders from the Conservative Party met in Birmingham, and there all sounded like revolt. The country now grapples with the administration and priorities of a new prime minister, Liz Truss. Chief among the hot-button issues are Truss' tax cuts — now reversed for high earners — and growth stimuli that have been criticized both by the Bank of England and the global International Monetary Forum.
Hoteliers want to be optimistic, and there's no doubt that is the feeling in the upper-upscale and luxury segments, where spend seems unabated.
As Richard Clarke, managing director of business advisory AB Bernstein, said in some economic spheres, “spending is off the chart. So, what are you going to spend it on? You already have a Peloton, so you’ll probably spend it on travel.”
The question is how to secure such sentiment for the other segments of the industry.
Where UK Hoteliers Go from Here
In a month where the U.K. has mourned Queen Elizabeth II and witnessed a new government unleashing a growth strategy that has left most of the country perplexed, the hotel industry in the country met for its annual shindig.
What to make of it? Honestly, I am not sure.
The government policy of cutting taxes for the very wealthy did not and does not make sense in terms of the relatively longstanding policy by the same government to “level up.” In other words, the new policy seems to go against prior initiatives to provide more opportunities, encouragement to businesses and better living standards for parts of the country deemed more impoverished and in need of stimulant.
In a country seemed to be conservative in economics yet liberal in social provision and welfare, hotels seemingly must play fair with guests, and if one raises average daily rate — as the industry has been seen to do globally — then one also must increase the value appreciated and demanded by guests.
Hoteliers desire that, too, I am sure. They want to make hay when the sun shines, as the cliche goes, and please owners and investors at the same time.
Ingenuity should see the industry through, the continued tweaking of differentiated product that appeals to guests and investors alike.
The next year will be a tricky one, requiring strategies that hoteliers believe in 100% and can be aligned to the discretionary spend of guests.
There is an 81% (see Data Point of the Day below) chance things will move in the right direction, but most definitely, care needs to be taken.
Quotes of the Day
“Owners are saying their priorities are not aligned with long-term strategies but rather short-term ones due to the current macroeconomic climate, but we’re saying sign up now for [environmental, social and governance] ingenuities. We’re talking to partner after partner after partner on this. Assets with purpose are significant divers.”
—Kenneth Macpherson, CEO, Europe, Middle East and Africa, IHG Hotels & Resorts
“I’m not sure how much of this will be left standing by the time I finish this presentation.”
—David Smith, economics editor at newspaper The Sunday Times, speaking of the U.K. government's policy on tax cuts and growth initiatives.
Data Point of the Day
Samantha Ward, hotels leader, U.K., at business advisory PwC, said that while inflationary pressure has resulted in consumer spending on food up 4%, the increase in spend on travel and hotels has bucked the trend, coming in at a colossal 81%.