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The CEOs of Six Senses and The Brgenstock Collection discussthe luxury resort of the future

Wimberly Interiors present a stunning 7-page portfolio of hotel design trends

The 2014 hotel outlook around the world:45 country reports from Horwath HTL

Our trend spotters on asset management, sustainability,digital marketing, tourism and revenue management in 2014

Industry observations from our academic partners Cornell, Lausanne,

Hong Kong Polytechnic and ESSEC

2014HOTELYearbookFORESIGHT AND INNOVATION IN THE GLOBAL HOTEL INDUSTRY

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At Horwath HTL, we ocus one hundred percent on hotels, tourism and leisure. With over two hundred and ify

proessionals world wide, our network can draw on a tremendous amount o international experience and local

knowledge that gives us, and our clients, a unique advantage.

We offer a broad range o advisory solutions that covers the whole cycle o the hotel product, starting with planning

and development, on to asset management and operational advice, to transactional and inancial restructuring. At any

stage, Horwath HTL will add value to your project and ensure that you receive the very best support every step o the

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COUNTRYREPORT

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2013 SNAPSHOT

UK GDP recorded the fastest growth for three years,

with economic output rising by 0.8% between July and

September and 2013 growth forecast at 2.4%.

London performance has been volatile following the

Olympic year, although demand has continued to outstrip

supply with year-to-date October 2013 occupancy at

82.9%, a 2.2% increase against the same period last year;

and ADR at 137.72 (a 2.8% decrease), resulting in RevPAR

of 114.20 (a 0.6% decrease) according to STR Global (the

source for all performance data here).

The regional hotel market is fully recovering, with 10

months of consecutive RevPAR growth, with year-to-date

October 2013 occupancy at 73.5%, a 3.9% increase; and

ADR at 59.98, a 0.6% increase, resulting in RevPAR of

44.09, a 4.6% increase (versus the same period 2012).

Top five performing cities were Cambridge, Oxford,

Aberdeen, Bath and Edinburgh, while the bottom five were

Nottingham, Southampton, Newcastle, Leeds and York.

Transaction volume increased significantly, with

2.4 billion recorded in the first nine months of 2013,

representing an almost two and a half-fold increase on

2012 and the highest level since 2007, according to Savills.

Portfolio transactions returned to the market in force in

2013 as a result of bank driven sales. In addition, there

has been increased transaction activity in the regions

and limited drive to sell London assets, despite the vastinternational investment appetite.

New supply is focused largely on the budget and

4-star markets, with the vast majority being branded.

Development has been fuelled by leases, London and

allowances. In the regions, Birmingham, Manchester,

Glasgow and Edinburgh lead supply pipelines.

BUSINESS SCENARIOS FOR 2014 AND BEYOND

London will continue to attract tourists worldwide, and its

ADR is expected to recover, resulting in a RevPAR growth of

4% while consecutive GDP and GOPPAR growth recorded inthe regions in 2013 provide good foundations for a positive

2014, with 1.9% RevPAR growth forecast (forecasted by STR

Global in conjunction with Tourism Economics). While it

remains a challenge to convert rate growth down to the GOP

level, the corner appears to have been turned and regional

hoteliers should start to see this happening.

The rise of the OTAs has been a much-discussed topic which

has been the cause of concern for some hoteliers due to

commissions of up to 25% of the room rate. The extent of

the OTAs advertising and marketing resources suggests that

they will go on dominating at the expense of owners profit

margin. As a result, the hotels reaction should be a blend of

cooperation and competition.

Investment volume is likely to be slightly below that of 2013

despite more realistic price expectations on both sides and

transaction speed increasing. Further portfolio rationalization

is expected, although there is concern regarding investors

exit strategies for any regionally-led portfolios that come to

market. We will continue to see banks oload in the regions.

Private equity funds are likely to continue their interest in UK

hotel assets, particularly outside London, since the downward

yield pressure in the capital makes the regional returns more

attractive and IRRs are more aligned to their expectations.

Additionally, an increase in new, innovative hotel concepts

such as CitizenM, ZHotels, Moxy Hotels and Premier Inn Hub

is likely. These focus on high design and technology in small

spaces and aim to oer clients aordable quality, ideal for

city-center locations.

Mid-market hoteliers are likely to continue to find their space

more congested and competitive with pressure from modern

budget branded tech-friendly properties attracting customers

away from the tired products pervading this segment. New

branded products such as Hampton by Hilton and Alo are

trying to rebalance this.

The serviced apartment and hostel market is expected to

gain further traction, with more branded product appearing

and investors realizing the cost/return benefits in an under-

supplied and under-branded market.

We expect a continued increase in franchisees.

Lastly, in the short- to medium-term, there is concern

regarding a capex time bomb, where hoteliers have notinvested what is required in their hotels aer the lengthy

financial crisis.

UNITED KINGDOM byAlexandra van Pelt i

Country reports are brought to you byHorwath HTL

CO

UNTRYREPORTS

Alexandra van Peltis an Associate Director at Horwath HTL (UK).

She assists the team with development, valuations and asset

management assignments. Before joining Horwath HTL, she worked

in the hotel team at DTZ and at Marriott Vacation Club International

in the Resort Development EMEA team. Alexandra started her career

in hospitality at Orient-Express Hotel de la Cit, Carcassonne.

107www.hotel-yearbook.com

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a global brand offering complete solutions across all markets. Over the last 20 years, Horwath HTL has

gained extensive market knowledge through involvement in thousands of projects. We use this experience

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requirements, large or small, national or global, Horwath HTL can help you succeed.

Hotel, Tourism and Leisure

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The CEOs of Six Senses and The Brgenstock Collection discuss the luxury resortof the future

ESPAs Sue Harmsworth on the coming changes in the global hotel spa industry

The 2014 hotel outlook around the world: 45 country reports from Horwath HTL

Our trend spotters on asset management, sustainability, digital marketing,tourism and revenue management in 2014

Industry observations from our academic partners Cornell, Lausanne, Hong KongPolytechnic and ESSEC

2014HOTELYearbookFORESIGHT AND INNOVATION IN THE GLOBAL HOTEL INDUSTRY

www.hotel-yearbook.com

This e-publication may beorderedonline| 19.50

For more country reports by Horwath HTL

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