Isle of Man
Hotel Solutions completed a Hotel Futures Study for the Isle of Man in January 2016. The objective of the study was to make a robust, independent, evidence-based assessment of the potential for the future development of the Isle of Man’s hotel offer in terms of the upgrading of existing hotels, the development of new hotels, and the managed exit of poor quality stock.
The study found a hotel industry on the island that has been in decline for many years and that has fallen behind competitor island and resort destinations when it comes to the choice of hotel accommodation that the island now offers. However, with strategies now in place for economic, population and tourism growth over a longer season, the study shows clear potential for renewed growth in the island’s hotel market given investment in existing hotels and some new hotel provision, but concludes that the challenges of operating hotels on the island and funding hotel investment here will require Government intervention if the opportunities are to be fully realised.
Our research showed a need for additional hotel provision to grow peak season demand, cater for events-related business, and better meet the needs of the corporate market. We found evidence of shortages of good quality hotel and guest house accommodation in June, July, August and September for leisure break guests, event visitors and group visits. Our research suggested that these shortages will be exacerbated in the next few years as further poor quality large guest houses close as their owners retire and are unable to find buyers for their properties as going concerns. New supply will be needed to replace these losses, particularly for event periods. Market research undertaken for Isle of Man Tourism in 2015 clearly showed that there are sizeable potential British and Irish markets for leisure breaks on the island during the summer and potentially also the shoulder season, that can be attracted given improved marketing and additional hotel provision. New high quality and branded hotels should help to attract new business in terms of corporate demand that is currently being lost due to the quality of the current hotel offer, and leisure markets that can be attracted to higher quality hotels and through the brand strength, customer bases, national and international marketing and central reservations systems of branded hotels. It is however evident that new hotels are likely to dilute winter trade, as the potential for winter leisure demand on the island is very limited.
We concluded that the priority going forward is about renewing the island’s hotel offer, rather than significantly increasing its hotel stock. This will require an integrated approach that accelerates investment in existing hotels and large guest houses alongside some new hotel development in terms of budget and boutique hotels, and possibly a new international brand 4 star hotel as part of a planned mixed use development in Douglas. There will also be a need to manage exit of poor quality stock that cannot feasibly be improved. We made eight key recommendations to the Isle of Man Government:
- The establishment of a Hotel Investment Fund to accelerate investment in existing hotels and support the development of new hotels;
- A ‘last ditch’ marketing programme to try to find buyers for the closed hotels and guest houses on Douglas seafront before letting these properties go for alternative uses;
- A clear hotel planning policy and development management approach for hotel planning applications, based on the evidence contained in the Hotel Futures Study;
- Exemption from the current work permit system for hotels and guest houses, in order to ease their staff recruitment problems;
- A quality awareness programme for the island’s hotel and guest house owners, alongside marketing and business management training and advisory support;
- The implementation of the new Destination Management Plan for the island in terms of improving destination marketing and events development to boost shoulder season demand;
- Active engagement with Isle of Man and UK property developers, hotel companies and investors that could be interested in bringing forward hotel investment projects on the island;
- The implementation of the economic development strategy for the island to grow corporate and contractor demand for hotel accommodation.
‘The work completed by Hotel Solutions was thorough and very professional. It was well researched, robust and the final report was very well balanced, measured and independent. The findings will be used to support and substantiate policies now and in the future. We would have no hesitation in using their services again.’
Angela Byrne, Head of Tourism, Isle of Man Government