UK Hospitality Trends: What to Expect in 2024

Despite the challenges that the UK hospitality industry continues to face, owners, operators, and investors have many reasons to look forward with great optimism.  

While we specialise in people strategy and recruitment, Hospitality People Group is committed to continuously exploring the full hospitality landscape to identify trends and insights to support our clients in finding the best solutions for their businesses.  

Here are some of the key themes that we foresee will impact the hospitality sector in 2024. 

Hotel Investment
Investment trends in the hospitality sector are a valuable longer-term indicator of expected performance, and confidence in the UK market is booming. The rapidly increasing hotel supply in London, but also Edinburgh, Glasgow and Manchester, is being driven by both domestic and international demand. According to a recent report by Deloitte, London is expected to become the most attractive European city for hotel investment in 2024, with 11,000 new rooms planned to open.  

Outside of London, Edinburgh has the largest supply of five-star hotels in the UK with over 60 active hotel projects that are due to add around 5,000 rooms to the city’s hotel market. Some notable openings include  W Hotel, Tribute (expected to open in August 2024), and the Hyatt Regency Edinburgh Marina Hotel. 

The increase in supply will put ever-increasing pressure on the recruitment market, so like last year’s Battle for Retention, businesses that manage to retain their valuable employees may be better positioned than those that don’t. 

Travel Numbers
With the latest passenger travel figures from Heathrow, there’s a strong indication that 2024 will mark a significant milestone in the travel industry. For the first time since the pandemic, the total number of passengers passing through Heathrow is projected to surpass the figures recorded in 2019.  

A closer look at the international arrival data also reveals some intriguing trends. Travel from the Middle East and North America has not only recovered but has also exceeded the levels seen in 2019. The Asia/Pacific region is still lagging, with approximately 1.5 million fewer travellers in 2023 compared to 2019, but the majority of this shortfall occurred in the first half of 2023, suggesting that the gap is closing. While there is a disparity across different regions, the trend is positive and offers valuable insights for the hospitality industry as it welcomes more global travellers in 2024. 

Super Luxury Hotels 
The last year has seen a number of high-end luxury hotel openings in London, including The Peninsula and Raffles London at the Old War Office. Next year will see a new Mandarin Oriental and Maybourne’s new, all-suite, The Emory Room. Rates for these hotels all start at £1,000+, and this minimum rate expectation has already become a standard expectation for existing luxury hotels. According to a recent article from the Guardian, there is a new era of exclusivity, and with an expected 18% more visitors to London forecasted to spend 25% more than last year, there is an expectation that these higher rates will continue to attract those who can afford them. 

With these increasing rates and guest expectations, there will be skyrocketing costs and often unpredictable increases. At the highest luxury level, these costs can be far more easily passed onto guests, but guests at anything less than ultra-luxury hotels are likely to be a little more price-sensitive.  

Inflation and Rising Costs
The UK hospitality industry continues to face challenges due to inflation and rising costs. The 9.8% minimum wage increase to £11.44, which comes into effect in April 2024, will put pressure on the wage structure at all levels in hospitality. Many businesses may have to raise their prices again to cope with the increased costs. Some may consider reducing employee hours, but given the demand for talent, this could be a risky solution. Inflation, which is expected to remain above 3% by the end of 2024, has also increased the costs of raw materials and energy. Energy costs, in particular, have soared by more than 50% since 2021, making it difficult for hospitality businesses to operate profitably and sustainably.  

Just as strong financial leadership was so crucial during the pandemic, the direction now needed to ensure that the increasing revenues expected in 2024 translate into increased profit, will be essential. 

Hospitality Recruitment
The hospitality sector has been struggling to fill vacancies for some time, but the situation has been exacerbated by shifting demographics, the pandemic, and Brexit. With nearly half a million less 18 year olds than 10 years ago, the combination of the pandemic and Brexit has made it much more difficult to replace these potential employees, while skills shortages have made it harder to find qualified employees for specialised roles.  

Unfortunately, the recent announcement regarding the increased threshold for minimum salary needed to get a skilled worker visa is likely to increase pressure on this shortage. According to Kate Nicholls, UKHospitality’s Chief Executive, “There were 8,500 hospitality visas issued last year, which helped bring in talented chefs and managers of the future. Around 95% of those would no longer be eligible under these plans (an increase from £26,200 to £38,700), despite being offered competitive salaries.” 

Once again, the Battle for Retention is an increasingly important strategy for all hospitality businesses as they try to minimise employee turnover with a strong workplace culture.  

We hope this article will provide you with some insights and inspiration for 2024. 

If you are looking for a partner to support your people strategy in 2024, then please get in touch. 

Dan Akhtar, Managing Director – HPG Advisory Services
+44 208 600 1166 / +44 7808 157796
dan@hpgsearch.com 

Chris Denison Smith, Managing Director – FM Recruitment
+44 20 8600 1160 / +44 7775 711923
chrisdenisonsmith@fmrecruitment.co.uk  

Guy Lean, Managing Director – Madison Mayfair
+44 20 8 600 1180 / +44 7813 009787
guylean@madisonmayfair.com 

Andrea Shaw, Director – FM Recruitment
+44 20 8 600 1160 / +44 7714 236469
andreashaw@fmrecruitment.co.uk