How changing guest behaviour and constrained supply are pushing operators toward new formats and smarter income strategies
Nov 18, 2025
The UK hotel industry enters 2026 with steady demand, limited new supply, and ongoing cost pressures. Despite challenging economic conditions, the sector remains stable and continues to reward operators and investors who prioritise efficiency, innovation, and strategic repositioning.
Key takeaways
- Resilient demand drivers: International travel, event-led trips, and domestic leisure continue to underpin performance despite economic headwinds.
- Cost pressure response: Rising operating costs are pushing hotels to focus on productivity gains, automation, and flexible staffing to protect margins.
- Sustainability as strategy: Energy-efficient technology, smart monitoring, and waste reduction support both cost control and ESG expectations.
- Evolving revenue models: Extended-stay formats, hybrid accommodations, and better use of underutilised spaces help diversify revenue and meet changing guest needs.
- Capital discipline required: Selective financing conditions make proactive refinancing, joint ventures, and active asset management essential for maintaining liquidity and returns.
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