When considering new development or repositioning opportunities it is often said that a hotel market is already “over supplied” or that there will be insufficient demand in that location.

This over simplifies a complex supply and demand relationship with hotel and other accommodation demand driven by numerous, often less obvious sources, even down to the ubiquitous visiting friends and relatives market.

These perceptions can be exacerbated by the data available; looking only at hotel performance data can be misleading as relevant competitors might be in short supply or not exist at all, and it doesn’t consider future opportunity.

The level of frustrated demand that exists in a market is also frequently misunderstood: that is demand that cannot be satisfied, and therefore staying out-with the market area, due to lack of suitable accommodation nearby.

The ESG agenda and technology are driving more purposeful commercial demand, with experiential travel driving a different type of leisure demand; it is important to fully understand the dynamics of demand, where people want to stay and in what type of accommodation.

At AR Hospitality Consulting we really get under the skin of a market to understand the specific type of demand from different drivers, the future growth trajectory and what needs to happen to hotel supply to meet this demand now and in the future.

Recent examples from live projects include:

  • A major conference and event venue with a number of hotels nearby already. Primary research uncovered an enormous amount of hotel demand from different types of events, but also frustration and missed opportunities in the form of business lost due to the perceived quality of the hotel stock, not providing the desired products or service
  • A small international airport in terms of passenger numbers, and consequently very limited hotel supply locally. Primary research on this occasion identified considerable unsatisfied demand (often travelling many miles to find suitable accommodation) from burgeoning aerospace, advanced manufacturing and military sectors
  • A suburban location with very dated hotel stock and complete lack of contemporary products and multinational brands. Significant opportunities are being missed from ease of access to the motorway network and by rail to the city centre (one of the most visited in the UK), considerable number of pharmaceutical and advanced manufacturing businesses based nearby as well as a handful of major visitor attractions in the sub-region

These are just three recent examples where, on the face of it, it would be easy to dismiss the need for new, relevant and contemporary hotels to satisfy current and future demand requirements.

It is always worth digging deeper to understand the specific drivers, their future growth and whether the current supply is both sufficient but also fit for purpose.

Get in touch for further details or to discuss your hotel project

Andrew Renouf – 07584 186520 andrew@arhospitalityconsulting.co.uk