UK hotels increase refurbishment investment by 57 per cent
Capital expenditure rose from £1.03bn in the previous year to £1.62bn in 2015/16, the company’s research showed, with investments seen as a bid to stay competitive in a marketplace that is increasingly full of online-only, low-cost competitors such as Airbnb or FlipKey.
The market also responded and holidaymakers’ tendency to seek ‘staycations’ in the wake of the poor post-Brexit pound.
This rise is the third consecutive rise in spending in the UK, but only the second time it has broken the £1bn barrier since 2011/12.
The increased investment is said to apply to all styles of hotel, from budget groups such as Travelodge up to more luxurious properties, Funding Options said.
Funds spent went beyond simple interior decoration, the group suggested, with customers’ increasingly-high expectations meaning property owners are now investing in extra services and infrastructure such as free and constant Wi-Fi, spa treatments, and a wider selection of dining options.
Hotels – including independent and smaller boutique-style businesses ‒ are also increasingly featuring kitchens led by well-known chefs, as well as holding workshops and wine tasting events, and even creating initiatives such as ‘digital detox’ weekend packages, at which guests are encouraged to turn off all internet-connected devices.
Conrad Ford, chief executive of Funding Options, which calls itself ‘an online business finance supermarket’, said: “Established hotel chains are investing more into their offerings to keep their market share in the face of increased competition. The rise of tech rivals offers customers increased options often a cheaper rate, which could hit the revenues of both established chain and independent hotels.
"It is now about giving the customer a different experience from Airbnb rather than trying to compete on price."
Refurb fever
A number of high-profile UK hotels and restaurants have seen significant investment in the past few years, including Flemings Mayfair, which has re-opened this month following a £15m renovation, alongside new restaurant Ormer Mayfair from Shaun Rankin.
Other significant refurbs have included the just-announced multi-million pound London Marriott Hotel Regents Park; Sheraton London Park Lane, which recently restored many of its original 1920s features into a new style of room and now offers the restaurant Mercante; the Grosvenor House from JW Marriott, which revealed an £8m renovation plan in July this year; The Goring, which shut for the first time in its then-104-year history for an update in early 2015; and the Lanesborough near Hyde Park, which re-opened in 2015 following a staggering £80m+ overhaul.
