NEW FOREST HOTEL MARKET FACT FILE
September 2019
INTRODUCTION
The New Forest Hotel Market Fact File provides the latest available information on:
• The current hotel supply in the New Forest; • Recent hotel development; • Current hotel development proposals; • Recent hotel performance (2016-2018) • The key markets for hotel accommodation in the New Forest; • Market trends; • The prospects for growth in demand for hotel accommodation.
All of the data and information included in the Fact File is drawn from a survey of New Forest hotel managers undertaken by consultants Hotel Solutions between May and July 2019.
For further information and contacts or to discuss your requirements contact:
Andrew Bateman Tourism Manager Economy, Transport & Environment Hampshire County Council EII Court West Winchester SO23 8UD
Tel: 01962 845478 Email: [email protected]
New Forest Hotel Market Fact File 1 September 2019
NEW FOREST HOTEL SUPPLY
Current Hotel Supply
• The New Forest currently has 36 hotels, with a total of 1,150 letting bedrooms. This hotel supply is analysed below by standard and listed in full in the table overleaf. The New Forest’s current hotel supply primarily comprises a mix of 3 and 4-star hotels. The Forest also has two luxury 5-star country house hotels (Chewton Glen and Lime Wood), three boutique hotels and inns, one 2-star hotel and four budget hotels.
CURRENT HOTEL SUPPLY – NEW FOREST
Standard Hotels Rooms % of Rooms 5 Star 2 103 9.0 4 Star 9 399 34.7 Boutique 3 74 6.4 3 Star 17 395 34.3 2 Star 1 15 1.3 Budget 4 164 14.3 Total Hotels 36 1150 100.0
• Most of the New Forest’s hotels are independently owned and operated. New Forest Hotels is a local hotel company that operates 5 hotels. Carey’s Manor and The Montagu Arms are in the same ownership. Only 7 national and regional hotel chains are represented in the New Forest – The Pig; Hand Picked Hotels (Rhinefield House); Luxury Family Hotels (New Park Manor); Macdonald Hotels (Elmer’s Court); Green King Inns (White Rabbit); Premier Inn (3 Hotels) and Travelodge (1 hotel).
• The hotels in the New Forest are all relatively small in size. The new Premier Inn Ringwood (84 bedrooms), Carey’s Manor (77 bedrooms) and Chewton Glen (70 bedrooms) are the largest hotels. The average size of New Forest 4-star hotels is 44 bedrooms and the average size of 3-star hotels is 23 bedrooms.
New Forest Hotel Market Fact File 2 September 2019
NEW FOREST HOTEL SUPPLY
NEW FOREST HOTELS – SEPTEMBER 2019
Hotel Standard/Type Bedrooms
Beaulieu The Montagu Arms 4 Star 22 Master Builder’s House Hotel 3 Star 26 Beaulieu Hotel 3 Star 35 Bramshaw Bramble Hill Hotel 3 Star 8 Brockenhurst The Pig Boutique 31 Rhinefield House Hotel 4 Star 50 Careys Manor 4 Star 77 Balmer Lawn 4 Star 54 Forest Park Hotel 3 Star 38 Thatched Cottage Hotel 3 Star 14 The Cloud Hotel 3 Star 17 New Park Manor 3 Star 24 Cottage Lodge Hotel 2 Star 15 Cadnam Bartley Lodge Hotel 3 Star 40 Lymington Chewton Glen 5 Star 70 Macdonald Elmer’s Court 4 Star 42 Stanwell House Hotel Boutique 29 The Angel & Blue Pig Boutique Inn 14 Passford House Hotel 3 Star 40 Premier Inn Lymington Budget 20 Lyndhurst Lime Wood 5 Star 33 The Crown Manor House Hotel 4 Star 50 The Bell Inn 4 Star 28 Forest Lodge 4 Star 36 White Rabbit Hotel 3 Star 15 The Stag Hotel 3 Star 11 Ormonde House Hotel 3 Star 19 Penny Farthing Hotel 3 Star 19 Milford-on-Sea South Lawn 3 Star 26 Ringwood Burley Manor 4 Star 40 Moorhill House Hotel 3 Star 31 Premier Inn Ringwood Budget 84 Travelodge Ringwood Budget 40 Stoney Cross Travelodge Stoney Cross Budget 20 Sway The Manor at Sway 3 Star 15 Woodlands Woodlands Lodge Hotel 3 Star 17
New Forest Hotel Market Fact File 3 September 2019
NEW FOREST HOTEL SUPPLY - CHANGES
Changes in Supply 2014-2019
New Hotels
• A new Premier Inn budget hotel (84 bedrooms) opened in Ringwood in January 2019. This is the only new hotel to have opened in the New Forest in the last 5 years.
Hotel Closures
• The Lyndhurst Park Hotel (60 bedrooms) closed in 2014. Proposals to redevelop the site for housing and retirement apartments were rejected in 2018.
Investment in Existing Hotels
• Most of the hotels in the New Forest continually invest in refurbishing their bedrooms, public areas and restaurant, bar and banqueting facilities on an ongoing basis.
• In terms of significant upgrading programmes:
o Lime Wood has undergone a major refurbishment programme and added a new Lake Cabin;
o Chewton Glen has upgraded its bedrooms, continued to open treehouses (the hotel now has a total of 14), and opened a cookery school in 2017.
o Stanwell House has been repositioned as a boutique hotel;
o The Forest Lodge Hotel has upgraded to 4 stars.
o The Thatched Cottage Hotel in Brockenhurst reopened in 2016 under new owners, after having been closed for a number of years.
New Forest Hotel Market Fact File 4 September 2019
NEW FOREST HOTEL SUPPLY - CHANGES
Proposed Hotel Development
Hotels Under Construction
• There are no hotels currently under construction in the New Forest.
Proposed Hotels
• There are no current proposals for new hotels in the New Forest.
Planned Development of Existing Hotels
• Most of the New Forest’s existing hotels plan to continue to invest in maintaining their quality.
• Two hotels are looking at adding bedrooms.
New Forest Hotel Market Fact File 5 September 2019
NEW FOREST HOTEL PERFORMANCE
Occupancy, Achieved Room Rates and Revpar
• Average annual room occupancies, achieved room rates and revpar figures for New Forest 3 and 4-star hotels for 2016, 2017 and 2018 are summarised in the table overleaf.
• 4-star hotel performance has been very strong in New Forest over the last 3 years, broadly in line with the national averages for UK provincial 3/4-star chain hotels. 3-star hotel performance is not as strong. 3-star hotel occupancies have fallen in 2017 and 2018 to below the national averages, as many hotels have focused more on rate than occupancy. Achieved room rates has risen as a result, and revpar results for 3-star hotels have slightly improved. Many 4-star hotels have also focused on more rate-driven strategies, with the result that 4-star hotel occupancies have dropped back a little in 2018 but achieved room rates and revpar figures have increased. The average figures mask significant differences between hotels. Some achieve higher occupancies but lower average room rates, while others focus more on rate with consequently lower occupancies.
• The New Forest’s 5-star hotels trade at very high room rates. Room occupancy levels vary significantly between the two hotels.
• There is no data available on budget hotel performance in the New Forest.
New Forest Hotel Market Fact File 6 September 2019
NEW FOREST HOTEL PERFORMANCE
NEW FOREST HOTEL PERFORMANCE 2016-2018
Location/ Standard of Hotel Average Annual Average Annual Average Annual Room Occupancy Achieved Room Revpar 4 % Rate 3 £ £ 2016 2017 2018 2016 2017 2018 2016 2017 2018 UK Provincial 3/4 Star Chain Hotels 1 75.6 76.5 76.7 83.22 86.43 88.95 62.66 66.14 68.19 UK Provincial Hotels (All Standards) 2 76 76 76 69 71 72 52 54 55 New Forest 4 Star Hotels 76.5 77.1 75.5 79.97 85.83 91.25 61.21 66.18 68.87 New Forest 3 Star Hotels 76.1 71.0 70.4 67.14 71.85 74.48 51.10 51.02 52.43
Source: Hotel Solutions survey of New Forest hotels May-July 2019
Notes 1. Source: TRI Hotstats UK Chain Hotels Market Review 2. Source: STR Global 3. The amount of rooms revenue (excluding food and beverage income) that hotels achieve per occupied room net of VAT, breakfast (if included) and discounts and commission charges. 4. The amount of rooms revenue (excluding food and beverage income) that hotels achieve per available room net of VAT, breakfast (if included) and discounts and commission charges.
New Forest Hotel Market Fact File 7 September 2019
PATTERNS OF DEMAND
Patterns of Demand
• Estimated average weekday and weekend occupancies for New Forest hotels in 2018 are summarised in the table below.
NEW FOREST HOTELS - WEEKDAY/ WEEKEND OCCUPANCIES – 2018
Standard Typical Room Occupancy % Mon-Thurs Friday Saturday Sunday New Forest 4 Star Hotels 69 81 94 64 New Forest 3 Star Hotels 65 83 91 61
Source: Hotel Solutions survey of New Forest hotels May-July 2019
• Weekend occupancies and room rates are very strong for New Forest hotels. All hotels consistently fill and command high prices on Saturday nights through the year. Many hotels also consistently fill on Friday nights between April and October. Sunday occupancies are lower, but not as low as in other parts of Hampshire, with a number of hotels successfully running Sunday night promotions to boost occupancy.
• Midweek demand for hotel accommodation in the New Forest is more seasonal. Occupancies and room rates are strong between June and September but low and more variable in the winter. Winter demand is also more price-driven.
New Forest Hotel Market Fact File 8 September 2019
NEW FOREST HOTEL MARKETS
Midweek Markets
• Leisure break stays are the key midweek market for New Forest hotels, accounting for 70-90% of their weekday occupancy. The New Forest is the main draw for midweek break visitors, who are predominantly emptynester and retired couples visiting from London, the South East and the Home Counties. Many are regulars that frequently return to the same hotel. Some hotels with family rooms and leisure facilities also attract families for short breaks during school holiday periods, and some pre-school families visiting for Peppa Pig World at Paulton’s Park between April and October..
• Residential conferences are an important secondary midweek market for the New Forest’s 5-star hotels and some 4-star hotels, and a minor source of midweek occupancy for other 3 and 4-star hotels.
• Local corporate demand and corporate business that is displaced from Southampton when the city is busy are further midweek markets for some 3 and 4- star hotels, typically accounting for about 10% of their midweek trade. The Southampton Boat Show and Seaworks conference are peak times for corporate business to be displaced from Southampton.
• Contractors are the main midweek market in the winter for some 3-star hotels, and likely to be a key market for the New Forest’s budget hotels.
• Other midweek markets are:
o Cruise passengers departing from Southampton; o Midweek weddings; o Overseas tourists; o Special interest groups e.g. car clubs, walking groups, bowls groups, bridge groups, Dutch and German group tours visiting gardens.
New Forest Hotel Market Fact File 9 September 2019
NEW FOREST HOTEL MARKETS
Weekend Markets
• Weekend break stays are the main weekend market for all New Forest hotels. Weekend leisure guests tend to be younger couples aged 30-50 (with older couples staying more for midweek breaks) from London and the South East coming for a relaxing or romantic weekend, or to go walking, cycling or sailing. As with midweek break guests, many are regular weekend guests that return to the same hotel. Many are dog owners. Hotels also attract some families that come for the weekend either to visit the New Forest or Peppa Pig World at Paulton’s Park.
• Events also generate weekend business for New Forest hotels and can be the motivator for a weekend break stay. Key events that generate hotel stays are:
o Beaulieu Autojumble; o Beaulieu Boat Jumble; o Other events at Beaulieu; o South Coast Caravan & Motorhome Show; o New Forest Show; o Cycling, running and triathlon events - The Wiggle New Forest Sportive; New Forest Triathlon; The Swashbuckler Middle Distance Triathlon; Race New Forest; o Sailing races; o New Forest Fairy Festival at Burley Park; o Netley Marsh Steam Fair; o Bournemouth Airshow; o Concerts at St Mary’s Stadium in Southampton; o Goodwood Festival of Speed.
• Weddings and wedding guests are a secondary weekend market for most of the New Forest’s hotels, typically accounting for around 10% of their weekend occupancy.
• Other weekend markets are:
o Family get togethers and weekend celebrations; o Cruise passengers; o Overseas tourists; o Corporate visitors and contractors arriving on Sunday nights.
New Forest Hotel Market Fact File 10 September 2019
MARKET TRENDS
Market Trends
• New Forest hotels have benefited from the growth in the staycation market that the UK has seen since the EU Referendum result in 2016 and the subsequent fall in the pound, which has made holidaying abroad more expensive. The strength of this market has enabled hotels to attract more midweek break stays through the OTAs, deal sites such as Secret Escapes and Travelzoo, and their own marketing activities. Weekend break business has also remained very strong, allowing hotels to drive up their weekend room rates. Some hotels have seen a reduction in the length of stay for midweek breaks and there has been growing demand for B&B rates rather than half board terms.
• Some hotels reported an increase in demand from families coming to visit Peppa Pig World, both during the week and at weekends.
• A few hotels reported higher levels of business from overseas tourists.
• Some New Forest hotels reported an increase in weddings business and demand for weekend family celebrations and get togethers. Other hotels reported a downturn in wedding bookings in 2019, but good forward bookings for 2020.
• A number of New Forest hotels reported a reduction is residential conference business over the last three years. Some attributed this to them being unable to offer good Wi-Fi because of the poor quality of broadband connections in the Forest. Two hotels reported an upturn in team building demand and one has seen an increase in incentive groups business.
• There has been a reduction in corporate business being displaced to New Forest hotels from Southampton as new hotels have opened in the city.
New Forest Hotel Market Fact File 11 September 2019
DENIED BUSINESS 1
Denied Business
• All New Forest hotels regularly fill and turn business away on Saturday nights throughout the year. Some also consistently turn away business on Friday nights, while others only tend to do this between April and October. Saturday night denials can be significant in the summer months. Friday night denials are also at higher levels in the summer.
• Many New Forest hotels also turn business away during the week in the peak summer months of June to September.
• One 4-star hotel reported frequently being unable to covert enquires for larger conference due to its bedroom capacity.
______1. Business that hotels have to turn away because they are fully booked.
New Forest Hotel Market Fact File 12 September 2019
FUTURE PROSPECTS
Prospects for 2019
• New Forest hotels are generally positive about their prospects for 2019. Most hotel managers expect to see an increase in both room occupancy and achieved room rate this year. Some hotel managers anticipate little change in their achieved room rate results however, as a result of greater price competition, with a number of hotels having reduced their room rates. Greater levels of business through OTAs have also constrained achieved room rate growth for some hotels, due to the commission charges that they have then ended up paying.
• While New Forest hotels are generally positive about revenue growth in 2019, a number commented that their operating costs are rising more rapidly, resulting in a squeeze on their profits.
Prospects for 2020 and beyond
• Looking ahead to 2020 and beyond, there are a number of positive indicators of likely future growth in demand for hotel stays in the New Forest:
o The prospects for continuing growth in the staycation and overseas tourist markets are very positive. National forecasts for UK tourism 1 project an average annual growth rate for domestic tourism of 3% through to 2025, and an average growth of 6.1% per year in inbound tourism. As a leading visitor destination, the New Forest should benefit from this growth.
o Population growth in Hampshire will continue to generate demand for weddings in the New Forest and business in terms of visits to friends and relatives and people attending family parties. The county’s population is forecast to grow by 114,560 between 2018 and 2025, an increase of 8.3% 2
1 Tourism: Jobs and growth: The economic contribution of the tourism economy to the UK – Deloitte/Oxford Economics, November 2013 2 Source: Hampshire County Council Small Area Population Forecasts
Winchester Hotel Market Fact File 13 July 2019
FUTURE GROWTH PROSPECTS
o 2020 look set to be a strong year for weddings, with many New Forest hotels reporting good forward wedding bookings.
o The continuing expansion of Paulton’s Park, with its new Tornado Springs zone opening in May 2020, should generate increased demand for leisure break stays, which New Forest hotels will be able to capitalise on.
o Cruise passenger demand for hotel accommodation in the New Forest may increase as the Southampton cruise industry continues to grow, depending on how quickly new hotels come forward in the city to capitalise on this market.
o Esso have announced an £800m investment in new plant at their refinery at Fawley to increase the production of low sulphur diesel by 45% and secure the long-term competitiveness of the site. This is likely to generate significant contractor demand for budget hotel accommodation during the construction phase, together with ongoing corporate demand for 3 and 4-star hotels.
• On a negative note, the New Forest’s hotel industry is facing continuing challenges with staff recruitment, which are likely to be exacerbated by Brexit if EU hotel workers are no longer allowed to come to the UK.
New Forest Hotel Market Fact File 14 September 2019
SOURCES OF FURTHER INFORMATION
For further information and contacts or to discuss your requirements contact:
Andrew Bateman Tourism Manager Economy, Transport & Environment Hampshire County Council EII Court West Winchester SO23 8UD
Tel: 01962 845478 Email: [email protected]
New Forest Hotel Market Fact File 15 September 2019