Locality Matters

It is tempting to think of the ‘hotel industry’ as a monolith, the same as technology or oil. But in reality, it is an amalgam of a thousand tiny industries.

What do I mean by that? Situations like the flooding in Cumbria show us in harsh light how the ebb and flow of other major industries, selling their wares nationally or indeed globally, is a different world. The British hotel sector is booming according to almost every metric by which you can measure it, and yet a local issue, a catastrophic event, can cause a region to suffer. Similarly, Aberdeen hoteliers’ rocky road in recent years bucks an otherwise nationally upward trend.

This month, the microcosmic weather system is the nuclear power plant project at Hinkley Point. The government has finally given it the go-ahead, and commercial real estate experts are hopping with excitement about the effect it will have on demand in the area (and therefore the number of high-value instructions they will receive): thousands of workers being shipped into a locale for the best part of a decade makes the area’s hotels suddenly very attractive to investors.

If you’re in hotels and you want to make a few quid by buying and/or developing, get your hands on something near Hinkley: it’s virtually guaranteed the exercise will yield handsome profits as room nights double or triple.

It cannot be stressed enough how important it is to digest information about our industry on its own terms. We are encouraged in this country to think of sectors as coherent edifices thanks to the constant publishing of catch-all data about retail, construction, manufacturing and employment. Of course this makes it easier for politicians to get a broad-brush picture of a whole economy, and to be fair to them, on what other basis are central governments to legislate? It is not, however, an intellectual approach we all need follow in our own business.

To really understand what is going on, and to make the best of the opportunities which present themselves, we must retain a sense of parochialism – my hotel is not the same as yours even if the inbound tourism stats are all pointing up. There’s no shame in individualism. Indeed, that is what makes so many of the UK’s hotel establishments such great places to stay.