Unlike our summer climate, on a five year view the hotel sector in Northern Ireland has enjoyed a sustained period of fair weather. According to Department for the Economy statistics, almost 1,250,000 hotel beds were sold in the first five months of 2016, a stellar performance that is 28% higher than the same period in 2011.
For Belfast, the phenomenon of not being able to find a hotel room is not new and it is unsurprising that the City Council region still boasts the highest hotel occupancy rates in the province. The statistics however indicate that hotels in the regions are also beginning to do better, with the council areas of Derry City & Strabane and Newry, Mourne & Down both reporting occupancy rates that are higher than at any stage over the five year period.
The larger players in the market are continuing to improve, with almost 70% room occupancy on average during the five-month period. It is unsurprising that the confidence in the sector is reflected in the development of new hotel facilities throughout Northern Ireland with numerous hotel projects either ongoing or due to commence in Belfast before the end of the year.
On closer analysis, however, there are some early warning signs for the industry. Performance in 2016 was weaker than the same period in 2015, the first decline in sales volumes since at least 2011. Although the 3% decrease in the number of beds sold will be in part due to poor weather and strong pre-Brexit sterling exchange rates, the hotel industry in Northern Ireland cannot be immune to the challenges facing the industry across the globe.
Hotels worldwide are experiencing a good deal of market pressure, much of it from new sources. Airbnb and other sharing economy providers are growing in popularity and are claiming a significant share of the growing demand for accommodation, even in Northern Ireland. The Department for the Economy statistics show that in the two years between 2014 and 2016 guesthouses and B&Bs have significantly increased their share of bed nights sold from 12% to 15%.
In addition, more and more guests are booking through online travel agents who take substantial commissions, and when guests do arrive, they expect the same immediacy of service and control they get at home and at work through their smartphones.
A recent report from Grant Thornton has identified ‘Personalisation’ as one answer for hotels looking to maintain or grow their market share in this challenging environment. By meeting guests’ individual needs, hotels can win greater loyalty. From online check-in, to the app that customises the mini-bar, Personalisation can help hotels stand out from the crowd.
“Personalise or perish” should be the mantra at the heart of hotel companies’ efforts to build their brands and lay platforms for long term success. The new build hotels will have an advantage in the early adoption of technology. The risk for existing hoteliers is that they will struggle to make the necessary inroads to remain relevant to the guests of tomorrow.