UK hotel sector enters new era with wave of international arrivals

A new report by software platform SiteMinder shows that the UK hotel industry is entering a new era of travel following a rise in international arrivals throughout 2023. Based on more than 115 million hotel bookings, the report reveals that hotel check-ins from international guests grew by 17% in 2023 to 52% of stays year-on-year. This aligns with global trends, which saw international check-ins rise by an average of 33% from the previous year.

The top travel source markets for British hotels were the US, Germany, France, Australia and Italy. James Bishop, SiteMinder’s VP for Ecosystem and spokesperson in the UK also stated that the Asian travel market is also recovering and there’s an increase in desire to travel.

Drilling down into the UK booking trends, SiteMinder found that compared to other destinations, the UK experienced some of the shortest stays in the world in 2023. 96% of the stays are for four nights or less. Bishop stated that the UK isn’t viewed as a leisure country, but generally attracts more business bookings.

However, the UK saw an increase in international arrivals and the industry has also seen an increased number of group bookings in 2024 compared to 2023.

In spite of increased prices, the average daily rate (ADR) for UK hotels in 2023 jumped 8% from 2022 to £193. ADR unsurprisingly peaked during the summer holidays, averaging £213 in June 2023, while Friday stays were the most lucrative, with an ADR of £219, followed by those on Saturday (£204) and Thursday (£197). January was again the cheapest month for guests, with an ADR of £155.

The percentage of total arrivals to UK hotels, by month, revealed a busier start to the year meant that seasonality smoothed slightly in 2023. Alongside roughly half of the countries in Europe, July was again the month with the most check-ins, closely followed by August.

Short stays, due in part to London being a haven for business travel, were again a driver of the vast majority of arrivals, with UK hotels hosting among the shortest stays in the world. Eighty-six percent were for 1-2 nights, compared to the global average of 81%, while 96% were for 1-4 nights. Bishop says: “Even though the UK is considered as a short-break country stay, it can still represent opportunities to the sector if they encourage longer stay collaborations with different packages, for eg: stay four pay three packages.”

Cancellations decreased slightly again in 2023 and were on par with the global average of 20%, although they remained 3% higher than 2019’s cancellation rate. 2020 saw the highest rate of cancellations.

Bishop says the findings are encouraging for UK hoteliers, but they shouldn’t expect a return to the old normal at a time of industry-wide change. He states that hoteliers must review their distribution strategies and be positioned to benefit from the return of international travel––in particular the “Asian giants”.

He also suggests being equipped to match the dynamism of today’s hotel guests and leverage the UK’s competitive advantage in short stays, whilst driving longer stays where possible. “While international travel is returning strongly and traveller demographics are normalising, today’s guests are a strong departure from those hoteliers once knew. Increasingly, travellers have a nuanced approach to spending,” says Bishop.

He concludes: “Travellers are experience-driven and prepared to purchase extras beyond the cost of their room, but are more often turning to packages and promotions that allow them to continue travelling the way they know and love.”