Kings of Chelsea

Trends in Hospitality

It seems almost in bad taste to write about the hospitality industry at the moment, as it has been decimated globally by this year’s events. It’s still not clear what the ramifications of the assorted lockdowns and travel restrictions may be as it is too early to tell the knock-on effects. Certain parts of the world may not have had to close hotels and resorts, but the lack of movement of the customer base from areas that were worse affected still meant an appalling year in terms of business. Many hotels need to operate at a significant percentage of capacity to even break even, so it is truly worrying to consider what the state of the industry may be in six months time, even if some normality has returned by then. On a personal level, I stayed in a small independent hotel on the South Coast in-between lockdowns, and on checking out I was told that I was in effect one of the last customers as they were closing their doors for good, the first time the premises would not be operating as a hotel for over 100 years. 

All of this comes in stark contrast to the state of the industry only a year ago, when the hospitality industry was in rude health. Despite the crisis of 2007/8 tourism had come back strongly, and industry figures suggested that at the top end (boutique and 5 star plus resorts & hotels) were doing well, with a large number of prestige projects in the pipeline. 

There’s no doubt that there will always be demand for places to stay that have a unique design, interior, view, situation, service or indeed all of the above. Clients evolve and become more discerning as time goes on, similarly in the restaurant industry. The general level of luxury, finish and attention to detail needs to be continuously improved to gain the prestige customers. This also means high investment, not just with each refurbishment or new build, but the intervals in which renovations and upgrades take place. In line with the luxury market, customers are always looking for the “new” and the “different” and if as an accommodation provider you are unable to react to this, you will get left behind. New players in the market create a wider field and more choice, making it even more important to focus on your USP and service levels. 

The improvement at the top level has served to pull up the rest of the industry, and it is no coincidence that the rise of the “boutique” hotel has coincided with advances in luxury both at home and abroad. I often look at the parallels between the hotel industry and the pub/restaurant example, with the rise of the “gastropub”. Because of higher customer expectations, even basic level operations had to raise their game, so most pubs had to create a much improved food offer just to survive. Similarly, small independent guest houses, hotels, bed and breakfasts, had to go down the “boutique” route to compete for clients. In terms of design, this meant that even the smallest operation had to start to understand something about interior decoration and design, and to engage with the market to see what was happening out there. 

Of course, the budgets available to businesses vary tremendously, but where a truly high end operation might have custom designed furniture and even employ the services of a famous architect, even the small player might now complement their interiors with “designer furniture” or a splash of paint in “heritage colours”!

Returning to the theme of “trends” though, certain tropes have been prevalent in the last few years. The market could be said to have been split almost into two camps – that of “discreet luxury” and that of “astonishing decadence”. Each has its own advocates, and there is clearly a market for both. But to return to my initial point, the underlying principles are an attention to detail, immaculate service, and perhaps above all, the creation of an “experience”. Taking many cues from luxury retail, the hospitality industry is all about “immersive and experiential journeys” so that any stay is memorable, whether you are paying £200 or £20,000 a night. There are many ways in which to lure the customer – an in-house restaurant run by a famous chef, impeccable eco-credentials, a famous interior designer overseeing the makeover, an extension by a starchitect. It really is like fishing – by creating the “hook”, the business can reel the clients in. It’s all about what kind of bait you employ!

One small caveat – there is also a balance to be struck between attracting a continuous stream of new customers and countering this with a solid base of repeat clients. At risking a vast generalization, it could be argued that the “discreet luxury” path is better at retaining loyalty, while the “astonishing decadence” tends to get the clients who are looking for a one-off “occasion” event. There’s no doubt for instance, that the Burj-Al-Arab caters for a different crowd to the Connaught, though of course there will be small overlaps. 

It has become a fantastic market out there for those who enjoy to travel and to find remarkable places to stay, let us hope that the sector recovers strongly enough for this to continue.