UK: The 2024 Urban Living Festival offered a comprehensive overview of the current trends and challenges shaping the hospitality and real estate sectors, with several key themes emerging throughout the many discussions and presentations held across the event’s six stages.
The editors at International Hospitality Media [George Sell – Urban Living News, Eloise Hanson – Boutique Hotel News and Serviced Apartment News, and Paul Stevens – ShortTermRentalz] have each provided an overview of their respective stages and covered the key takeaways.
Hotels and hospitality
• Adaptive reuse continues to be a driving force in urban development, despite planning limitations. While office and retail buildings present redevelopment and operational challenges due to structural constraints, the location of these sites adds to the on-property experience. The speed and cost-effectiveness of repurposing, coupled with ESG advantages, are fuelling the popularity of adaptive reuse projects. It also presents a creative alternative to the homogeny of hotel brands.
• Corporate travel budgets are shrinking as a result of remote work, leading to greater emphasis on flexible pricing and seasonality. While the average stay of relocation has reduced, remote workers are extending stays for leisure purposes. Dominant demand drivers include insurance, distressed housing, production, and students, and across Europe there are increasing requests for outside city centres. The return of business travel is supported by STR data which shows that most growth is coming from weekday stays.
• Operational diversification and mixed-use properties, such as including different hospitality and living brands under one roof, requires bold decisions. Local governments want to learn how multi-purpose buildings operate, and it is important planners are educated early in order to support regulatory changes. Community engagement is essential when dealing with heritage properties. Legacy – in terms of brand reputation or individual experience – is critical for stakeholder support.
• Action towards roadmapping for net zero by 2030 is being delayed due to data ie. Challenges around collection, measurement, and analysis. Dashboards must also evolve to accurately show comparisons between profits and energy used. In the UK, there are currently no incentives from governments or banks to go green, unlike Europe which is more progressive in supporting sustainable developments.
Short-term rentals
• While city councils and national governments introduce increasingly stringent restrictions on short-term rentals [note the likes of Barcelona, New York City, Athens, Budapest], Sykes Holiday Cottages’ Ben Edgar-Spier and Smart City Policy Group’s Matt Curtis called for regulators to consult with the industry to implement “proportionate” regulation, which directly combats the housing shortage without paralysing an industry that is a revenue source for hosts and property owners and is a significant driver for tourism. It is also important to observe markets where rules are being applied sensibly and moderately, as well as where they are not, in order to create long-term sustainable urban planning policies and addresses ‘over-tourism’ concerns.
• Artificial intelligence [AI] and automation are crucial components in the operations of a range of short-term rental and hospitality businesses, helping to personalise stays and build meaningful relationships with guests, improve security and convenience for guests, and reducing operational friction for property managers. One ongoing advancement will see property managers and agencies develop their own technology to integrate sustainability practices in their properties, as Sykes Holiday Cottages is striving to do, due to heightening demand and expectations from consumers.
• The short-term rental sector remains an attractive proposition for funding opportunities, hence the two urban operators on the investment panel raising almost $100 million combined [Bob W and Blueground] so far this year, while office conversions, adaptive re-use and tech-enabled flexible living represent lucrative hotspots for investors seeking to complete transactions in the space. Despite this, the segment faces significant headwinds with local residents pushing back against perceived ‘over-tourism’ and the introduction of strict regulations in key destinations for both leisure and corporate travel.
• Short-term rental supply is increasing in the market, creating even greater competition when events – or ‘distractions’ – bring more visitors to urban and leisure destinations. The power of Taylor Swift fans – or ‘Swifties’ – should provide plenty of lessons for hosts and property managers when Oasis come to London, Manchester, Cardiff and Edinburgh in 2025 as they will need to price correctly to maintain stable average daily rates [ADRs] and occupancy, while guests seek maximum value for their money, as per data from Key Data and Wheelhouse.
Main stage
• A panel on the development landscape looked at finance, planning and investment. It was planning that dominated the discussion – and several more to follow in the day. Harry Harris of development consultancy SUSD proposed that more public private partnerships are the way forward to unlock housing delivery.
• A fascinating presentation by Nikodem Szumilo, director at The Bartlett Real Estate Institute, associate professor at UCL, addressed the impact of AI on the hospitality and real estate sectors – particularly its potential to save time across numerous disciplines. The presentation included a live demonstration using ChatGPT.
• The real estate’s wish list from the new government was discussed in the following panel. Moderator, James Pargeter, senior advisor at GAA, said he is encouraged by the initial government statements regarding boosting housing delivery. Stewart Moore, CEO of Kooky, was less impressed and said the government does not have enough understating of the living sector and the various asset classes within it.
• Plotting the sector’s route to net zero was the next subject on the main stage. All panellists expressed their excitement at the impending publication of the UKGBC’s net zero carbon buildings framework, which they all see a potential guide which can provide some clarity in a confusing space. Sophie Goddard, director of ESG at Canary Wharf Group shared some of the group’s experience around topics including recycling of building materials, biodiversity net gain, and supply chain management.
• On a related topic, Simon Chinn, VP research & advisory services at the Urban Land Institute, gave a presentation outlining strategies, policies and construction techniques which can adapt to climate change and ensure we are building climate resilient urban environments. Some of the measures outlined were applicable from a single building up to entire neighbourhoods.
• The final main stage session looked at the impact of technology right across the built environment, and covered building design, construction processes and property management. Moderator Dominic Grace of Dominic Grace Limited lamented the slow uptake of digital twins for all buildings, while Vervlife’s Katherine Rose highlighted that the level of technology spend at an asset can vary significantly according to the source and intentions of the capital that is funding it.
All presentations from Urban Living Festival 2024 can be viewed here.
Festival sponsors and partners included: Airbnb, Bidwells, Corporate Housing Factory, f.r.a., Fladgate, IMS Connect, LOFT, PriceLabs, res:harmonics, STR, Touch Stay, Urban Chic, YOSAA, ARL, ASAP, Coliving Ventures, FlexSA, IoH, the STAA, The Class Foundation, and ULI.
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