The evolution of city centre hospitality

Emma Poulton Parley, Scotland regional manager for ALTIDO, part of DoveVivo Group, considers why pop-up hotels are thriving and how the hospitality landscape is evolving in city centre destinations.

There can be no doubt that the hospitality industry is evolving. Lines between sectors are becoming increasingly blurred as short-term rental (STR) operators look to diversify to negotiate regulations and hoteliers embrace a hybrid hospitality approach to meet traveller demands.

In 2022, the market size of the hotel industry in the UK amounted to £16.42 billion (up from £11.28 billion the previous year) and accommodation occupancy rates reached 83 per cent in the summer season. Amidst this strong growth, hospitality operators on all sides need to develop ever-more innovative means of maintaining a foothold in the market to keep pace with the market and satisfy increasingly high city centre demand.

Key drivers of demand in city centre spots include the desire for experiential travel connecting travellers to the heart of the action and limited time events stimulating high levels of demand over short time frames. The Edinburgh Fringe Festival is a strong case in point. Established in 1947, The Fringe is the largest performance arts festival in the world and is surpassed only by the Olympics and the World Cup when it comes to global ticketed events.

So, how does the tourism and hospitality industry continue to thrive in capital cities like Edinburgh during the Fringe when STR room inventory dwindles and hotel capacity is sold through? One solution lies at the intersection of hotels and short-term rentals.

Helping to sustain inbound tourism levels, pop-up hotels in purpose-built student accommodation (PBSA) buildings provide additional accommodation in the heart of the city throughout the valuable summer months. Operated as short-term seasonal hotels, these premier PBSA buildings are transformed to offer guests alternative, affordable and convenient lodging and rooms in student accommodation.

This adaptable hospitality approach utilises existing, empty accommodation to provide an adaptable solution that can help meet peak demand in undersupplied city hotspots. The inherent flexibility of the room stock also answers the needs of a diverse range of travellers: everyone from individuals and couples who want to take advantage of low-cost rooms for city breaks in top locations, to young families and groups of friends who want hotel amenities but will also benefit from the PBSA communal spaces (games rooms, cinemas, gyms, etc.).

This blend of hotels and short-term accommodation and the increasing popularity of pop-up hotels clearly demonstrates that the ongoing merging of hospitality sectors is well underway. Hoteliers and STR operators must embrace the best of both models to meet traveller demand, sustain inbound city-centre tourism and thrive in our city centres.

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