As the future of the high street hangs in the balance, the focus has shifted beyond purely retail offerings to a broader mix of uses for town centre regeneration. In the new equation, what value can hotels add?
Although hotels have the power to attract tourists and bring new demographics to an area, they have historically suffered from the perception that they do not support employment to the same extent as building new offices, for example.
But the industry has much to offer. Around 38m people visited the UK last year, contributing £23bn to the economy, according to government data. A further 9m visitors are predicted by 2025. The rise of budget airlines has helped to fuel demand for hotels in urban locations. Now the effort is needed to reverse wider perceptions of the industry.
Finding ways to quantify the social impact of hotels on local economies, rethinking the use classes order and strengthening the ties between consultants are among the efforts that might give the sector a signal boost.
Operators, developers, architects and investors also all have a role to play in promoting hotels during the planning process.
“We all have a responsibility, as people working in the sector, to shout about the benefits of the schemes we are doing,” says Jonathan Manns, board director and head of planning at Rockwell Property.
Measuring the benefits
“The hospitality sector – particularly hotels – has been quite slow to talk about the benefits of its uses within a local environment,” agrees Derek Griffin, head of acquisitions at Premier Inn owner Whitbread.
“We have always considered at Whitbread [that hospitality is] at worst a benign use, at best a really positive use. Some of the perception of that is not shared by local communities necessarily, or active members of those communities, and the planning sector.”
In a bid to counter this, Whitbread is commissioning an empirical report to take an in-depth look at “what a Premier Inn brings to a local area, and how to articulate that”.
Griffin says: “Over time we need to build up a body of evidence and a stream of consciousness that is saying: ‘this is a positive use and in these times, it can offer people – whether it be customers, staff, investors – a really positive story.’”
Setting out the sector’s role in creating jobs and supporting local businesses is likely to form a key aspect of this.
On Whitbread’s part, the company aims for at least 50% of the workforce in each of its hotels to be local residents.
“There is a massive benefit to us to have local [residents as] members of staff, and to provide a serious career path and opportunities through apprenticeships and training programmes,” says Griffin. “It is vital for planners to understand. There is responsibility on us, as well as them, to talk to each other and really [understand] that information.”
Rockwell’s development pipeline, meanwhile – which includes schemes at Kensington Forum, SW7, Westferry and Canary Wharf, both E14, – will deliver close to 1,500 jobs for local communities.
“We have a responsibility as a developer to tell people about the positive things we are all doing and the trickle-down benefits it will have for the local economy,” says Manns.
These manifest beyond employment practices. At the Canary Wharf development, for example, services such as linen cleaning and food provision would be provided by local businesses.
“There is real scope for more integration of uses within a hotel, outside of beds, into the community,” Manns says. “All of these allied services that a hotel needs to operate will bring further jobs and spend to the local economy. But someone needs to start quantifying this.”
Designing the hotel of the future
Another important part of the equation is figuring out how hotels can adapt to meet changing consumer expectations as disruptors such as Airbnb continue to move the goalposts.
“People want an authentic experience,” says James Mitchell, partner at Axiom Architects. “It’s that response to the Airbnb push, where they want to know what’s happening in the local area.
“They don’t want to feel like they are just rocking up and staying at a hotel for just one night – they want to [access] local knowledge. People want more choice. People are living different lives now, and technology is a big enabler of that.”
Some owners are opening up lower floors to accommodate new uses, such as flexible working space, as part of a drive to engage non-guests. Room sizes are also shrinking in urban locations, in line with changing dwell times.
More controversially, Manns argues that council planners must “get to grips” with windowless and basement conversions, to open up floorplans and address shortages in urban supply.
“Having cabin rooms underground does not preclude you from [offering] great service or an active ground floor, or meaningful human interaction,” he says.
We have a responsibility as a developer to tell people about the positive things we are all doing and the trickle-down benefits it will have for the local economy
“Having smaller or bigger rooms does not necessarily have any relationship with the quality of service being given, or the contribution a hotel can make to its community or surrounding area.”
Technology is also being deployed to offset the increasingly compact nature of hotel rooms. Griffin points to the Hub by Premier Inn brand, which launched in 2014, as an example of a proactive step taken to anticipate the industry’s direction of travel.
“We [found] from a lot of research that people were prepared to sacrifice the size of their room for the quality of their location at a price point,” Griffin says.
“Hub was a response to that. We raised the game on technology [to] offset the fact that they are smaller rooms. It links to [being] able to deliver viable projects in the kind of locations that we want to try and deliver Hub [so] the property has to work harder. A compact room means you can be more intensive in your investment.”
But while technology is rapidly redefining hotel offerings, Claire Camplisson, hospitality asset management director at Colliers, argues that its impact on the industry will be limited.
She highlights that more hotel brands are designing their spaces with interconnecting rooms and a central living area to appeal to groups that might otherwise choose an Airbnb.
“It is about social gathering,” she says. “That’s why technology isn’t that much of a problem. People still want to hang out with other people. We are social animals. Technology makes things smoother, makes the ride easier for guests, and for whomever is in the hotel – but you will never, ever make the hotel fully tech.”
Square peg, round hole
Since hotels are increasingly part of the conversation about repurposing properties on the high street, the provision of a greater mix of uses within hotels seems set to rise accordingly.
It stands to reason that planning definitions should also be shifting to accommodate this. However, the use classes order is proving a hurdle for an industry that is otherwise buzzing with fresh ideas on how to meet changing consumer attitudes.
“With planning we have a square peg, round hole scenario,” says Manns, pointing to the “fixed” nature with which it defines hotels, short-term lets or residential offerings.
“A new flexible hotel visitor experience does not fit neatly in that box,” he adds. “We have got a planning system that is very fixed and logical, but has an ultimately bureaucratic approach to assessing things against others that neatly fit in [some of those traditional] boxes.”
Griffin says that in three to five years’ time, he would like to see more “proactive” views from planning committees on how hotels can contribute towards mixed-use neighbourhoods.
“Planners are now having to think about ways to respond or offset the challenges that the high street faces,” he says. “Hotels are a part of [that] potential response.”
That said, it is not just down to improving collaboration with planners. To gain the best result, all corners of the industry need to raise more awareness around the topic.
“It’s trying to educate that wider set of consultants, from architects to planners, to investors – it’s trying to get all of these different stakeholders connected,” says Mitchell. “If they can understand exactly what’s going on, we can make better decisions as built environment professionals.”
This also applies to all manner of mixed uses that might indirectly benefit from a new hotel.
Manns says: “Increasingly, there is an alignment between what is good from a planning perspective in terms of giving back to a community and a local economy, but also what’s good from a pure investment perspective, in terms of driving a revenue for an investor.
“We need to help people in the wider industry and allied professions understand that win-win.”
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