Hotels at Christmas … Bah Hum Bug, or Ho Ho Ho?

In the UK Christmas can be a complete bonus for hotels, with festive parties generating room nights, high bar bills and decent revenues from their restaurants.

But that is not always the case.

Hotels not located in town centres, and that cater almost exclusively to corporate travellers often find business drops to levels where it is no longer economic to stay open.

The same can be true of conference hotels: if the event space is too large, or inflexible then bookings tend to drop off around the second week of Christmas in many locations, and often do not picking up until the second or third week of January, leading to a very lean spell for the hotel.

Matters can be made worse by higher staff costs at this time of year, along with more “price-sensitivity” in the remaining customers for such hotels.

Of course, some hotels see mixed trading. Budget hotels tend to fill up with guests visiting family and friends nearby, where there is “no room at the Inn” for them to stay with family.

But these same guests have a much lower incremental spend (on food and drinks) as they are only sleeping at the hotel.

Well-placed town centre hotels can really see trade increase during this period. Lunch and evening bookings in restaurants tend to be significantly higher than at other times of the year.

Corporate parties, especially when catering to national companies with multiple offices tend to generate additional room bookings, while a last-minute rush to get jobs completed by year end tend to ensure good trading in rooms sales continues. According to data from HotStats profit growth in December 2018 was led by increases in the Rooms, which was up 7.2% YOY (see panel below).

However, it must be remembered this usually the storm before the calm. January often brings a period of “corporate quiet”, followed by lower F&B income, as people put into place their New Year’s resolutions.

So, thank heavens for hotels with gym memberships to offer: the only growth area in trade for the first two or three weeks of the new year.

People have long been complaining Christmas is too commercialised and does not reflect the true meaning of the holiday. Well in business park hotels all over the UK there are signs that commercialisation is losing the battle at Christmas, and staff are having more time to spend with their families!