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Report
en_GB
55% of consumers used hotels in the last 12 months, up 5 percentage points year-on-year and marking a rebound from slower post-pandemic demand. However, value consciousness dominates consumer decisions, with…
UK
Hotels and Accommodation
simple
UK Hotels Market Report 2025
"Hotels must enhance their services and facilities to compete with alternative accommodations and establish themselves as inviting ‘third spaces' to drive repeat visits."
55% of UK consumers used hotels in the last 12 months, up 5 percentage points year-on-year and marking a rebound from slower post-pandemic demand.
Value consciousness dominates consumer decisions, with the cost-of-living squeeze leading to shorter breaks and a clear preference for the security and reliability of chain hotels.
Rising operating costs are now a key challenge for the sector, acting as the biggest threat to sustained growth. Hoteliers face pressure from higher payroll costs, shifting business rates and the introduction of new tourist taxes, threatening margins and prompting a reassessment of staffing, pricing and investment.
Inflationary pressures make it harder for hotels to compete on price with holiday rentals, which are perceived as offering better value, putting the onus on hotels to sharpen their competitive advantages.
At the same time, there is a growing appetite for hotels to serve as vibrant third spaces, blending high-quality foodservice, authentic local character and greater opportunities for social connection. Hotels that respond to shifting consumer values and embed themselves more deeply in local life will be best placed to compete and thrive long-term.
This Report Looks at the Following Areas:
Hotel accommodation over the last 12 months, including booking channels and comparison with other accommodation types
Future demand for hotel stays and reason for visitation, including increasing longer stays among high-earners
Perceived benefits of holiday rental properties vs hotels, and opportunities to drive competitiveness through family offerings and local character
Factors that most influence the choice of a hotel, including the importance of top-quality facilities
Trading up opportunities, including with childcare facilities and local culinary experiences
Collapse All
EXECUTIVE SUMMARY
What you need to know
Outlook for hotels
Opportunities
Best of both worlds: blend high-class service with a local touch
Win over families with dedicated services
Position hotels as a third space
THE MARKET
Snapshot – market size and forecast
Volume sees positive growth
Graph 1: volume of UK hotel/motel/guesthouse trips (domestic and inbound), 2020-25
Value holds steady
Graph 2: value of the UK and similar accommodation sector, at current prices, 2020-25
A slow recovery head for hotel stays
Graph 3: market volume forecast for hotel trips in the UK, 2019-30
Value continues to reach new heights
Graph 4: value forecast for the UK hotel and similar accommodation sector, at current prices, 2019-30
The cost-of-living crisis still looms large
Graph 5: perception of the state of the cost of living crisis in the UK trend data, 2024-25
Rising costs put pressure on the hospitality sector
Holiday bookings peaked over summer
Graph 6: holiday bookings in the last three months, Jan-Nov 2024 and 2025
Events drive hotel demand
THE CONSUMER
Participation in hotel stays
Hotel usage is on the rise
Chains grow against independents
Graph 7: select types of accommodation used in the UK in the past 12 months, 2024-25
Booking method
Website bookings are most popular
Online bookings take share from offline channels
Third-party booking most popular for independents
Graph 8: booking channels used for last hotel stay in the UK, by select accommodation types used, 2025
Future stays and purpose of visit
Consumers’ focus is on affordability
Graph 9: intentions to stay in a UK hotel in the next 12 months, by type of hotel, 2024-25
Interest grows in short stays and VFR
Longer holidays appeal to top-earners
Competition with holiday rentals
Rentals are seen as the value choice
Graph 10: perceived benefits of holiday rental properties vs hotels, 2025
Tailor family room offerings for children’s age
Local character could be a game-changer
Factors that influence choice of hotels
Cleanliness tops purchase drivers
Local guides are an easy win
Focus on top-quality facilities to drive spend
Graph 11: select factors that influence choice of hotels, by consumer segment, 2025
Trading up opportunities
Parents are willing to spend on childcare services
Graph 12: interest in trading up, 2025
Local culinary experiences appeal
INNOVATION AND MARKETING
Hilton and McLaren partner on F1-themed suites
Trip.com and Live Nation bundle hotels with concert tickets
Radisson Hotels offers direct restaurant booking
Perplexity now allows for hotel bookings
Fashion meets hotels in Michael Kors campaign
Summer at Rosewood emphasises the power of the moment
Warner Hotels offers more than just a room
APPENDIX
Market forecast data and methodology
Market size
Market forecast and prediction intervals (volume)
Market forecast and prediction intervals (value)
Forecast methodology
Forecast methodology – fan chart
Report scope and definitions
Market definition
Abbreviations and terms
Annual Business Survey by the ONS
The consumer
Consumer research questions
Consumer research methodology
TURF methodology
TURF analysis – additional data
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