RBH looks ahead to the 2023 hotel landscape
Experts in their respective fields, RBH Hospitality Management’s Executive Committee share their thoughts on the UK hotel industry after a year of change, challenges and success. From hotel investment patterns to the rising prevalence of sustainability in the procurement process, what lies ahead for 2023?
Institutional investors to dominate over private equity funds - Dave Hart, CEO
The UK transaction market has been very slow in 2022, driven by a lack of stable trading coupled with increased cost of capital which has seen many investors pause and take stock in recent months. I fully anticipate that we will see much increased transaction activity in 2023 which I believe will be dominated by the institutional investors who, as long-term investors, are perhaps the best placed to capitalise versus private equity funds that generally have a short to medium term view of the market.
With increasing rates will come growing expectations – Susan Bland, Managing Director
In a year full of ups and downs, 2022 did bounce back with corporate travel, and international travel returning much quicker and stronger than initially anticipated. This resulted in rate driven strategies that saw soaring room rates and healthy occupancies. It was also a year of staffing shortages, increasing cost pressures, rising inflation and ongoing political and economic turbulence.
I anticipate that 2023 will see the corporate and international markets continue to grow, with revenue levels exceeding the 2019 figures currently being used as a benchmark. However, with increased room rates, comes increased customer expectations in order to ensure value, so a huge focus on the customer experience is required and delivery of the highest standards. Achieving this in a world of staffing challenges will require a drive of technological solutions that can free up time and allow hotel teams to focus on personalisation. They will be expecting to be rewarded accordingly which will lead to further competition for the best staff who can be most productive.
The customers’ requirement for an increasingly eco-friendly experience will also drive changes in delivery of the experience and those who are not able to demonstrate their performance in this area will fall behind.
Forecasting costs to be approached with caution - Andrew Robb, CFO
This has been a unique year with really strong revenue recovery offset by extreme inflation levels and utility costs that have impacted everyone. As an industry we remain in a strong place and all of RBH’s forward booking data continues to be positive, however caution remains within forecasts, with a number of previously predictable cost lines potentially subject to change as everyone (including suppliers) settle into a new cost base. However, I remain hopeful that inflation levels will return to more manageable levels within the first half of 2023 and that we will continue to see the downward trend in staffing related issues that we have seen across the sector over the last few months.
Green credentials to be required in procurement process - Gregor MacNaughton, CTO
After a year where material prices soared by 10%, we’re now seeing as much as 20% inflation on projects priced in 2019 and 2020. This is likely to slow down the development of new build hotels and could lead to more focus on refurbishments of existing hotels.
Based on rising energy prices and the ever-increasing pressure to reduce our carbon footprints, we expect to see far more consideration from owners and developers (which we gladly welcome) for the introduction of environmental initiatives not only in new build hotels, but also in refurb projects.
More companies, and hopefully those in the construction industry, will begin to take a lead and start to consider their scope 3 emissions and how they are recorded, which can only be a good thing to help reach Britain’s net zero targets. At RBH, FM and capital, and development teams are already asking companies to demonstrate their green credentials through our procurement and tendering processes.
Digitalisation to continue with a focus on security - Vibhu Gaind, CIO
Where technology is concerned, 2023 will see another year of investment in automation and further advancements in direct-to-room arrival for guests. This will be driven by kiosks and online check-in, enabling hotel teams to focus on meaningful customer service. Due to staffing issues across the industry, there has already been a rise of digitisation like digital dining, and this will carry on growing. Data based analytics will become mainstream with consolidated data across a company, leading to a more concise view of the business and benchmarking ability.
Fast and efficient connectivity will be crucial, as room casting and streaming will be a standard across multiple brands and independent hotels. Governance will also take precedence, as lenders and funders start to ascertain risk. PCI-DSS and cyber certifications for the business will become a basic requirement – especially given the increasing number of targeted threats to hospitality.
News & Updates
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Susan Bland facilitates discussion on optimising workforce productivity and getting the most out of your teams at IHIF's 25th annual conference
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Celebrating the 20-year anniversary of Crowne Plaza London Docklands under RBH’s management since opening in May 2003
Giving Something Back
RBH wins Springboard’s Health & Wellbeing Award
21 April 2023
RBH picked up Springboard's award for Employee Health & Wellbeing in recognition of its commitment to its people