How are tourism trends shaping the UK hotel market?

DOMESTIC DEMAND AND THE ‘STAYCATION SHIFT’

Domestic tourism continues to underpin UK demand, with overnight trip intentions remaining stable despite ongoing cost-of-living pressures and elevated inflation in early 2026. However, this stability reflects behavioural shifts rather than volume growth, as travellers are becoming Increasingly selective about when and how they travel.

The staycation market remains structurally resilient, but increasingly competitive and dynamic, characterised by shorter stays, later bookings, and more targeted destination choices. As a result, demand is being redistributed, rather than growing, which is intensifying competition and requiring more active management of pricing, availability and conversion at property level.

INBOUND RECOVERY AND INTERNATIONAL FLOWS

Inbound tourism is continuing its gradual recovery, with VisitBritain forecasting 45.5 million inbound visits to the UK in 2026, generating £35.7 billion in visitor spending. This represents annual growth of 4% in visitor numbers and 5% in real visitor spending. Visitor expenditure is also expected to reach 96% of pre-pandemic levels.

Performance varies by source market, reflecting differences in economic conditions, travel costs and geopolitical exposure. North American demand, while not without uncertainty, remains a stable and valuable inbound segment, particularly Canada, supported by relatively strong economic conditions. While long-haul demand remains important for growth, its variability highlights the need for targeted, market-specific strategies rather than reliance on broad inbound recovery.

CHANGING TRAVELLER BEHAVIOUR

Travel behaviour is increasingly experience-led and flexible, with more price-sensitive, agile consumers, contributing to demand being spread more evenly across the year, though still driven by events and purpose-led travel.

At the same time, shorter booking windows and reduced lengths of stay are reshaping demand. Experience and destination appeal are playing a larger role alongside accommodation, creating opportunities for operators to capture more total guest spend.

IMPACT OF COST OF LIVING ON UK HOLIDAYS, SHORT BREAKS AND DAY TRIPS

Recent findings from the VisitBritain Domestic Sentiment Tracker, conducted by Ipsos, show a sharp uptick in plans to reduce overnight and day trips. Following a worsening perception of the cost-of-living situation, a growing proportion of consumers now expect financial pressures to persist.

This has translated directly into travel intentions. The percentage of consumers planning to reduce both overnight trips and day trips has risen noticeably compared with earlier periods, suggesting many households are reassessing discretionary spending.

CONSUMER BEHAVIOUR

The encouraging takeaway for the hotel sector is that many travellers are choosing to modify their behaviour rather than abandon travel plans altogether.

Research conducted by Ipsos shows that consumers are seeking ways to reduce the cost of holidays through a variety of spending adjustments. The most common responses include spending less on eating out, choosing cheaper accommodation options and looking for free or lower-cost activities at their destination.

James Bland, Commercial Director – Travel, Hospitality & Leisure at Ipsos said, “A silver lining for the sector, which may support trading in the second half of the year, despite the aggravation of spending caution by UK travellers, is the influence of cost of living on their behaviour and intentions to pursue a holiday in the UK instead of overseas in the next six months - and a possible prolonged staycation trend.

“According to VisitEngland and Ipsos findings, almost twice as many people as in 2025 - nearly one in five - will cope with the rising cost-of-living by holidaying in the UK instead of overseas. The top of the chart, however, suggests a persistent sensitivity on spend on both accommodation and eating out over the short-term.

“The behaviour change towards taking shorter breaks closer to home or opting for day trips instead of UK short breaks presents an opportunity for UK destinations to compete on experience-rich stays that may previously have been chosen by those travelling overseas.”

For more insights on the UK hotel sector, read the full report on our website: https://www.christie.com/sectors/hotels/uk-hotel-market-review-2026/

To get in touch with the authors, please contact:

Pierre Ricord, Head of Consultancy – Hotels: +44 (0) 7546 698 685 or pierre.ricord@christie.com

James Bland, Commercial Director – Ipsos Travel, Hospitality & Leisure:  +44 (0)7772 605303 or james.bland@ipsos.com