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UK hotel businesses remain under “serious” pressure due the growing demand of the short-term rental (STR) sector, according to the latest ONS figures analysed by RMS Cloud.
The report revealed that hotel businesses have grown only 5.6% from 12,385 to 13,080 in 2023 compared with the STR sector, which saw a 90.7% increase in the number of businesses, growing from 3,780 in 2013 to 7,219 in 2023 (or 3,430 new businesses).
It also highlighted that over the last decade STR businesses have grown 16 times faster, reflecting the changing priorities of travellers seeking “experience-led” accommodation.
As staycations surge, with a third of Brits predicted to holiday in the UK this year, travellers opt for environmentally friendly, experiential travel in accommodation that offers more space, privacy, and practical amenities.
Out of the 382 UK local authorities, 260 saw an increase in short-term rental (STR) businesses, averaging 13.2 new businesses per region.
In contrast, only 154 local authorities experienced growth in the hotel sector, with an average of just 4.6 new hotel operators per region.
Additionally, UK campgrounds have seen a notable 35% rise in new sites from 2,495 in 2013 to 3,375 in 2023 (an increase of 880).
Zen Valli, managing director at RMS Cloud, said: “It’s well known within the hospitality industry that STR businesses have been gaining momentum over the last few years but many will be surprised at how significant that disparity is when compared with hotels.
“While this is fantastic news for the STR and campground sectors, the pressure is now on hotels to find a way of catering to the shifting demands of today’s travellers who are seeking more authentic experiences. Whether that’s offering a more personalised, contactless service, or leaning towards the aparthotel approach where all guests have a kitchen and lounge area for a more ‘home from home’ experience, hotels will be urgently looking to gain more of the market share.”
