UK hospitality 2024: a summer of mixed fortunes and how to prepare for 2025

One of the most significant drivers of demand in 2024 has been large-scale events like the Taylor Swift Eras Tour, which helped push London’s hotel occupancy to 89.3% in July, matching pre-pandemic levels. Edinburgh, too, experienced similar spikes thanks to the Eras Tour and the Edinburgh Fringe Festival. These events brought a surge of revenue to these cities, pushing hotels to full capacity.

However, while these surges were a boon for business, they also introduced challenges, such as "event-driven inflation." This phenomenon occurs when high demand during peak times increases costs for both hoteliers and consumers. As service inflation rises in these peak periods, there is growing concern that this will keep operational costs high, putting further pressure on businesses.

In addition, while London and Edinburgh reaped the benefits of these events, regional hotels struggled to maintain steady occupancy, with many unable to compete with the high demand in event-driven areas.

At the same time, many UK hoteliers are struggling with the effects of the cost-of-living crisis. Disposable incomes are still recovering, which has led to shorter trips and a tighter focus on value-for-money offerings for domestic travelers. This reduction in domestic leisure spending has hit many regional hotels, which rely more heavily on the local market.

Adding to these difficulties are rising operational costs. Hotel room prices have nearly doubled over the past five years due to high interest rates, wage increases, and supply chain disruptions. Despite this, many hotels are struggling to maintain profitability, with regional occupancy rates still below pre-pandemic levels.

As a result, many hoteliers are forced to rethink their offerings, focusing on maximizing value for money while balancing rising costs. This is in line with European trends: Across the continent, tourism businesses have seen a sharp rise in operating expenses. According to Eurostat data, prices for vacation packages in July surged by 19.5%, well above the European average price increase of 6.6%.

In this context, maintaining competitiveness has become especially challenging for UK destinations. Hotels are not only competing with more popular domestic and international destinations but also with smaller, lesser-known spots that have successfully marketed their unique appeal. 

These hidden gems have managed to capture the attention of travelers through clever marketing strategies implemented over recent years. Hoteliers in provincial areas can take inspiration from these success stories and focus on promoting their distinct strengths to stand out in a crowded market.

Marketing played a crucial role in determining the success or failure of tourist destinations during the summer of 2024, and it will become an increasingly important tool in the future. 

Nudge marketing is the approach of gently influencing people’s choices and behaviors in a subtle, positive way without imposing obligations or bans.

The "nudge" theory is based on the idea that people often make decisions based on habits and biases rather than rational evaluation.

In the tourism context, communication plays a critical role in guiding choices and preferences, steering customers towards more varied and sustainable experiences while turning lesser-known destinations' unique traits into strengths.

For nudge marketing to work, it should be a collaborative effort among all stakeholders involved in promoting a destination, but individual hoteliers can also implement it through small changes in how they present their offerings.

Digital tools and online platforms provide essential resources for this approach, which starts with attracting as many visitors as possible to your website or social media channels and then providing them with travel ideas and tailored offers.

In this context, Google is one of the most powerful and cost-effective allies. If you'd like to learn more, check out our article on how to use Google Travel, Google Hotel Ads and Google Business Profile to drive bookings.

Once you've captured the attention of potential customers, you can implement a number of targeted initiatives, such as:

• Leverage social proof
• People tend to trust the behavior or decisions of large groups. Displaying real data such as positive reviews, stunning photos of past guests, or notifications about active visitors (e.g., "20 people are currently viewing this offer") can reduce hesitation and create a sense of trust and urgency.
• Promote unique experiences
• Offering packages that immerse guests in local traditions or natural heritage with detailed descriptions can help customers visualize the atmosphere of the destination and meet the growing demand for authenticity.
• Encourage off-season travel
• Offering attractive rates or promotions to encourage travelers to visit during less busy times can be even more effective when paired with messages that highlight the tranquility and exclusivity of an off-season stay, or the benefits of exploring the destination without the crowds.
• Work with local influencers
• Engaging local influencers or ambassadors to showcase the beauty and authenticity of lesser-known destinations through engaging social media content is grassroots promotion that has a higher chance of going viral and reaching a wider audience.
• Personalized communication
• Staying in touch with guests after their stay by sending property updates and personalized offers is key to building meaningful relationships and driving customer loyalty.
• Achieve and promote sustainability
• Working to improve the environmental sustainability of your property is a crucial step for those who want to position themselves as a desirable alternative to overcrowded destinations and attract tourists who are increasingly sensitive to environmental issues. To learn more, read our article and guide on how to make your hotel more sustainable and profit from it.

In conclusion, given the challenges that have emerged in the summer of 2024, hoteliers cannot afford to "sit back and watch" while waiting for external solutions.

Competition is fiercer than ever, and only those with advanced marketing, revenue management and operational strategies will remain competitive. Training, staying up to date, and having the right tools are no longer optional, but necessary to stay in business.

Finally, investing in employees will be a cornerstone of success: ensuring ongoing training, better pay and growth opportunities will not only improve service, but also enhance the property's reputation, increase customer satisfaction and foster loyalty - key ingredients for lasting success.

In an era where competition is heavily influenced by pricing, continuously adjusting your rates to match fluctuations in demand is one of the most effective ways to stay competitive without missing out on revenue opportunities.

Smartpricing is the dynamic pricing and revenue management software chosen by over 4,000 hoteliers across Europe to improve pricing strategies, save valuable time and increase revenue by an average of 30%.

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