COMMENT
COMMENT | PETER HANCOCK
The impact of
supply on demand
By PETER HANCOCK,
chief executive of Pride of Britain Hotels
H
ave you ever watched The to expire. The trick will go on working perceived in the same way as gold,
Antiques Roadshow on BBC 1? until a new disrupter emerges to you may say. Well, perhaps it could
If you have, you’ll have noticed challenge the way hotel search sites if we as an industry reduced our
how things that are beautiful and operate, which I believe will happen reliance on lower prices as the way
perfectly made can often turn out to soon, whereby customers will have to stimulate demand. Estate Agents
have pathetically low values, while access to what is truly the best value seem to have a far better grasp of
rarer items, which may be ugly or in for given dates and venues, immune this concept. Most will show at least
poor condition, are sometimes shown from the quest for commission. a few homes in their windows that
to be worth tens of thousands. It is
are already sold, subtly creating that
an object lesson in the laws of supply phenomenon ourselves when Pride of sense of urgency again. Just seeing
and demand. Britain reached its self-imposed limit the word “sold” reminds you it is the
of 50 hotels. Suddenly we received buyers who are competing in certain
hotel rooms in my experience. interest in membership from places I’d markets, more than the sellers.
More than once I have paid top never anticipated, making us wonder dollar for cramped and soulless about even stricter quality controls and demand in another sense, thanks
accommodation in exchange for the for the existing membership. There to high employment levels and a
convenience of being within walking is something highly attractive about relatively weak pound. Getting and
distance of a popular event, yet at being part of an exclusive club, both for retaining good people has become
other times have stayed virtually its members and their customers too. a greater headache for hotel owners
Much the same applies to
free in glorious surroundings where
At the extreme level, rarity puts
Of course we are victims of supply
than it used to be, forcing many
certain products completely out of to increase pay rates and to look
the reach of all but the wealthiest closer to home for the talent they
are masters in creating that sense of individuals: top vintages of need. Ultimately I think this may
urgency, showing how few rooms are champagne, large diamonds, central be beneficial as it can only improve
still available on your chosen date; London property and so on. It has the perceived status of a job in
making something plentiful appear always surprised me how well gold hospitality. Chefs, F&B managers and
to be in short supply. We know what retains its market value, given the housekeepers realise that their value
trickery is involved here but turn a number of alternative investments has risen due to the shortage of
blind eye to it normally. And it works. there are but one thing everybody decent candidates. They are neither
Customers really do crack on with knows about gold is that supply is ugly nor in poor condition, but they
completing their online bookings if finite, hence its high value. are worth a bit more these days…
business is slack.
The online travel agents (OTAs)
they believe the inventory is about
16
Last month we experienced the
www.hotelowner.co.uk
If only hotel rooms could be
and they know it.
May 2019