Boutique hotel trends for 2022: What’s next for the sector?

boutique hotel trends 2022

Want to know the boutique hotel trends for 2022 to look out for? In the below guest post, Anthony van Hoffen, Partner, and Katie Thomas, Associate, at law firm Lewis Silkin discuss what is on the horizon for the boutique and luxury hotel sector in 2022.

The impact of Covid-19 on the luxury hotel sector has, arguably, been felt stronger than in any other single area of the economy. The sector has been faced with an unparalleled fight for survival – with most hotels having to close their doors to customers for considerable amounts of time throughout the last year and a half. The fact that most in the industry have not only survived, but many are now looking to grow and adapt, is testament to the resilience of those in this sector.

Following the initial lockdown and the lifting of restrictions in July 2020, the hotel market has shifted considerably. International travel had all but come to a standstill, and business occupancy was almost non-existent. It wasn’t just travel restrictions that caused hoteliers to adapt, however – they had to address the seismic shift in lifestyle and working behaviours and look to take advantage of new opportunities.

Story continues below

Over the summer of 2020, and throughout 2021, the demand for luxury and boutique hotels in the UK has been steadily on the rebound. And this trend looks to be continuing, as evidenced by the regional UK hotel market occupancy rates reaching 67.9% at the start of the Autumn. Pent-up leisure demand caused by the pandemic is underpinning the ‘staycation’ boom.

It’s not just occupancy rates which point to this trend, however – there is also an increasing number of luxury hotels seeking, and gaining, investment. 4C Hotel Group has secured a £52 million investment facility from OakNorth Bank, which is set to see a five-star, 222-bedroom hotel in Central London, featuring a 4,000sq ft spa and fitness studio, as well as numerous meeting and event spaces. The fact that such a large investment facility is being provided to 4C is testament to the confidence that investors have in luxury leisure demand being at the forefront of the recovery.

Savills have also advised that UK hotel investment is set for a bumper year in 2022 with transactions forecast to reach £4.5 billion, which is on track to beat the 15-year average of £4.22 billion.

Where has the boom in the luxury leisure market left the traditional City business hotel, though? Two options seem to be emerging: either upgrading existing hotels that offer both business and leisure amenities (the Kimpton and VOCO brands that IHG are rolling out are signs of this type of hotel) or look to take advantage of potential relaxation in the planning systems to convert unused space in city centres.

The Ned in central London (pictured above) is a great example of what can be achieved now that planning rules are more relaxed. Previously B-Grade office space, it has been transformed into a five-star luxury hotel with a member’s club, 10 restaurants, gym and spa.

One Hundred Shoreditch is also set to open in February 2022, featuring three bars, a restaurant, coffee shop and five meeting and events spaces. Even former police stations are now being repurposed, with Wood Street police station set to be transformed into a luxury five-star hotel, with planning now being approved.

A further interesting development in this market is IHG Hotels & Resorts touting the ‘Vignette Collection’ as its new luxury and lifestyle brand. Each property will have a distinct identity, as the brand is aimed at independent hotels, but will welcome those into the brand. They expect to attract more than 100 Vignette Collection hotels in the next 10 years.

Finally, no article on boutique hotel trends for 2022 would be complete without reference to ESG. Not only must the luxury and boutique hotel market look to ensure that their physical buildings comply with the move to higher environmental standards and carbon-neutrality, but the social criteria demanded to attract both investors and employees must be met.

Savills has also tipped ESG compliant hotels to see a rise in demand. The Grove of Narberth (in Pembrokeshire, Wales) is a good example – this hotel has been included in the Small Luxury Hotels of the World ‘Considerate Collection’, which aims to recognise sustainable luxury hotels that are going the extra mile, with each hotel having to be “Community Minded, Cultural Custodians and Environmentally Conscious”.

Although the discovery of the Omicron variant may see recovery delayed slightly, the opportunities for luxury and boutique hotels to adapt to lifestyle shifts are certainly there, and there are already signs that the sector is moving forward and has the adaptability and foresight to meet the challenge.

Tags : coronavirusCovidomicon
Eamonn Crowe

The author Eamonn Crowe

Leave a Response