EXCLUSIVE: Top UK hoteliers assess the impact of Brexit on the US traveller

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We catch up with some of the UK’s leading boutique hoteliers to judge the impact of the US election, Brexit and the fluctuating market conditions and how this has filtered through to the decision-making of the US traveller.  

America remains one of the hospitality industry’s biggest target markets. And thanks to the media exposure and our country’s bold decision making, the UK’s popularity amongst American travellers has rocketed recently.

According to Visit Britain, over the last four years the fastest growing market by value in absolute terms has been the US, which contributed an additional £162m per year in visitor spending between 2011 and 2015.

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Visits to the UK from North America were up 7% in September 2016 to 420,000, up 8% in the three months prior to September and 4% up for the year to date. This was driven by consistently favourable monthly results particularly since the EU referendum in June.

In 2015, visits to the UK from America totalled 4 million and added up to 11% of total visitors to the country.  This year, the figures are tracking 6% ahead of this, but while the total is looking like it will exceed the 4 million mark as Boutique Hotelier went to press, the results still fall short of the record highs recorded in the year 2000.

Immediately post-referendum, the British pound hit a 31-year low compared to the US dollar as a direct result of recent events hitting the headlines in the UK. This strength of the dollar means there has never been a better time for international visitors to head to our shores.

And it’s not just London seeing a boost too. Destinations further afield such as the Yorkshire Dales, the Lake District and Wales are experiencing an influx of US tourists, who are venturing away from the capital to explore the countryside.

“We have seen a significant increase across the estate in US visitors in 2016 over 2015,” explains Andrew Grahame, CEO of Farncombe Estate in Broadway, which is home to Dormy House, Foxhill Manor and boutique hotel, The Fish. “Dormy House is up 5% against last year as is Foxhill Manor. Our new venture, the Fish, has also achieved 2% in its first year. We do have good representation in the US but the weakness in the pound due to Brexit does means the UK is a better value destination and this is the key driver as far as we can see.”

Perhaps the biggest success story of them all was Lucknam Park. The luxury hotel in Bath reported a staggering 95% increase in business from American travel agents between July and October, against the same period in 2015. Last year, 144 bedrooms were booked in this period compared to 281 bedrooms booked in 2016.

Since Claire Randall took over as managing director four years ago, she’s made it her mission to garner more trade from the US, and it’s clear that this boost isn’t simply as a result of Brexit. Randall visits the US two to three times a year and covers all areas from the West to East meeting travel agents via hotel representatives as well as attending the Virtuoso Travelmart in Las Vegas. Dubbed ‘speed dating for the travel industry’, the event sees hoteliers from all over the world sell to more than 350 agents during a four-day period.

Without this sales effort to build personal relationships with agents, the fallout from Brexit would not have been so pronounced at Lucknam Park. “The importance of building strong relationships with American agents really cannot be underestimated,” says Randall. “Following our efforts in the US, Brexit was then an added bonus, with many of the bookings from American agents and direct bookings being received at very short notice.”

E-day

The US election was seldom out of the headlines as voting day across the pond edged closer and neither did it die down once Trump took the title. For the Nadler Liverpool, election year usually means custom from the US drops off slightly, but this year it was a different story, which can certainly be attributed to the drop in pound.

“We have, in fact, taken more business in our Liverpool property,” says Andrew Marsh, general manager at The Nadler Liverpool, “with a longer average length of stay too. Although American visitors usually tend to stay in larger rooms due to travelling with family or in a group of friends, we have seen an increase in the number of guests upgrading on arrival to larger, more expensive rooms for additional comfort.”

Interestingly, London was more of a mixed bag, with some hotels reporting a growth, while others suggesting levels had remained consistent. 11 Cadogan Gardens, a luxury hotel that has recently been refurbished, counts the US as its second highest priority market and saw an increase of 13.6% year on year in the four months since the referendum vote.

Blair Pollock, rooms division manager at the hotel says: “I have seen an increase in ancillary revenue from US travellers and an increase in the revenue generated per head as they take advantage of the weak pound to book higher room categories. When the result of the vote was realised, we saw a spike of US travellers calling to pre-pay existing flexible reservations in order to take advantage of the dollar’s strength against the pound too.”

For The Capital, the five-star boutique owned by the Levin family, the presidential election put a slight dampener in demand in Q3, despite some movement from last minute bookings from the US taking advantage of the strong dollar.

“There was a more pronounced movement on last-minute bookings from Asian markets, after some initial movement from the US, but looking ahead there is plenty of interest for family travel early in the new year,” Kate Levin, general manager at The Capital adds.

Many luxury London boutiques benefit from a strong and loyal American customer base, and the general feeling is that this has remained consistent since both the election and the referendum.

Jeremy Robson, owner of Great Northern Hotel says the hotel’s American client base is around double the London average and while the property hasn’t seen a particular uplift in volume post Brexit, neither has there been a significant decline in US business, which Robson says historically typifies an election year.

At The Beaumont, part of the Corbin and King empire, it’s a similar story. Jannes Soerensen, general manager explains: “The Beaumont enjoys a very high percentage of American guests, at over 40%, and whilst we have not seen this amount rise significantly since Brexit, we have certainly seen it remain consistent, with strong demand for the forthcoming months.”

South Place Hotel, a D&D hotel in Moorgate in the capital, enjoys strong trade from the US all year round and counts it as its biggest market since the property opened in 2012. General manager Susanne Traudt says that she too has noticed a shift in spending behaviour, with the hotel’s international clientele willing to pay for premium and opting for higher category room types, in turn increasing ADR.

The biggest change she has recognised however is the change in market mix since Brexit. “Now a steadily growing proportion of our US business can be attributed to the leisure traveler,” says Traudt.

“During the week our international guests are still predominantly corporate travellers, however at the weekends and during school holidays, we are witnessing a much higher number of leisure visitors from North America and Canada.”

The other side of the coin

There is no denying the uncertainty surrounding the UK travel and tourism industries at the moment, and this hugely affects travellers’ decisions, not just from the US but from around the world. With the threat of terrorism still very real and Brexit rocking the boat, there are still things putting people travelling altogether.

“We have not seen a rise in US visitors at The PIG’s,” Tom Ross, operations director from Home Grown Hotels. “Unless others have seen a marked rise, my inclination would be that travellers, particularly the US, do not like uncertainty and with Brexit, all of the issues in the Middle East and of course, the US election, even the strong exchange rate will not draw them over quite yet.”

“At Gravetye Manor we have not seen a rise in US visitors”, says Andrew Thomason, managing director at Gravetye Manor. “Most US guests plan and book well in advance for their trip to the English countryside, we stay quite static with around 12% US trade during the summer months and overall for the year at 6%.”

The capital

In 2013, London was visited by an estimated 1.88m US travellers, making it the biggest visiting country, and figures also showed that those coming from the US also spent the most, with £1,526m spent in the capital alone.

Three years later, and this positivity seems to have continued. Research from London & Partners showed that visitors from the US to London’s museums and galleries have soared since the 2012 Olympics.

The capital’s biggest cultural attractions welcomed about 2.3 million visitors from the States last year, a rise of 11% from 2012.

Royalty was the biggest draw for Americans, with Buckingham Palace coming top of a ‘bucket list’ of experiences and the Queen named as the ultimate dream tour guide.

While London is brimming with attractions, other parts of the country suffer from poorer transport links and can’t begin to compete with the volume of footfall that passes through the capital.

Eamonn Elliott, chief executive at Rockliffe Hall, says that direct flights to Scotland, the North West and the South mean hotels in these areas have a huge advantage over the North East, and in his case, Darlington where Rockliffe Hall is situated.

“Post the Brexit result there has been no impact on the American market regarding Rockliffe Hall. It is must be said however until we forge a strong link in the North East with direct flights to the US with the correct carrier and not one which was a gesture in United Airlines, hotels in the North East will struggle to grow this key market.”

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