Recent global and domestic economic changes have created an unpredictable landscape for UK tourism. New US tariffs on UK goods and a series of rising domestic taxes are already casting a long shadow over 2025. Yet, despite these challenges, the outlook for inbound tourism remains optimistic. VisitBritain projects that international visitor spending will hit a record-breaking £33.7 billion in 2025 — a 7% increase from 2024.
For service providers like Smarhost, which support UK short-term rental owners and hosts in managing their properties efficiently, these forecasts represent both opportunity and risk. While international travel to the UK looks promising, domestic tourism may be hit harder by economic stagnation and increased living costs. This split trend means that hosts must adapt their strategies now to prepare for a dual-reality market: strong inbound travel, coupled with weakening domestic demand.
In this article, we offer a unique perspective on how UK property hosts can navigate this landscape by strategically diversifying, adapting, and leveraging services like Smarhost to not just survive but thrive.
1. Market Diversification: Look Beyond the Local
While domestic tourists have historically formed a significant portion of short-term rental bookings, current economic conditions — including higher taxes and reduced disposable income — could reduce this flow. To offset this, hosts must look outward.
Smarhost clients can harness the service’s dynamic pricing tools and global channel distribution to reach a broader, international audience. Now is the time to target visitors from regions less affected by current macroeconomic headwinds. Countries like China, India, and the Gulf States are showing increased interest in UK travel, partly due to cultural tourism campaigns and favourable exchange rates.
Tips for Diversification:
- Translate your listing descriptions into multiple languages using Smarhost integrations.
- Offer culturally relevant amenities (e.g., halal kitchens, rice cookers, etc.).
- Adjust check-in flexibility to accommodate late-night arrivals from long-haul flights.
- Invest in quality visuals and SEO-friendly content that appeals to international guests searching on global booking platforms.
2. Flexible Pricing Strategies: Value Is King in 2025
Price sensitivity will rise as both domestic and international travellers scrutinise their spending. Smarhost’s AI-driven pricing engine enables hosts to respond to real-time market shifts, offering dynamic discounts without sacrificing profitability.
Here’s how you can build flexibility into your pricing strategy:
- Create value-focused packages: Include extras like free parking, breakfast vouchers, or discounted local tours.
- Introduce loyalty discounts: Encourage repeat bookings with returning guest incentives.
- Use last-minute deals: Attract budget-conscious travellers with short-notice promotions.
- Tier your pricing: Offer weekend, mid-week, and long-stay rates to attract different audience segments.
These strategies are especially potent during off-peak seasons or when new taxes impact domestic travel. Smarhost helps automate these offers so hosts can stay competitive without the constant need for manual price adjustments.
3. Operational Efficiency: Do More With Less
The rising cost of living and increased taxation pressures aren’t just hurting travellers; they’re affecting hosts, too. Profit margins may shrink unless businesses streamline operations.
Smarthost users can mitigate these pressures through automation. Features such as automated messaging, smart check-in coordination, and calendar sync reduce admin workload and human error.
Ideas to Maximise Efficiency:
- Automate guest communications with Smarhost templates.
- Outsource cleaning and maintenance using trusted partner integrations.
- Implement self-check-in using key safes or smart locks.
- Track cleaning schedules and supplies to avoid over-ordering.
Every saved pound in operations is a pound that can be reinvested into marketing, guest experience, or property upgrades.
4. Local Partnerships: Community-Driven Success
When domestic demand dips, creating compelling local experiences becomes even more critical. Instead of competing with local businesses, collaborate with them.
Smarhost clients are in a prime position to leverage local partnerships. By giving you the following ideas for creating joint offers with nearby cafes, spas, or attractions adds value for travellers and encourages longer stays.
Ideas for Collaborations:
- Partner with local restaurants for guest meal discounts.
- Work with tour operators for package experiences.
- Collaborate with taxi services for airport pickups.
- Host pop-up events in your rental property (e.g., wine tastings, art nights).
Not only do these partnerships add unique charm to a listing, but they also encourage guests to leave glowing reviews and recommend your property to friends and family.
5. Market Monitoring: Stay Ahead, Stay Informed
In an uncertain economy, adaptability is everything. Smarhost equips hosts with real-time data and analytics. Understanding booking trends, occupancy rates, and average daily rates can help you pivot strategies quickly.
How to Stay Informed:
- Subscribe to Smarhost’s industry updates and insights.
- Regularly review your dashboard for seasonal trends.
- Set up alerts for competitor pricing and local events.
- Join Smarhost webinars or community groups to exchange strategies with other hosts.
FAQs About Hosting in 2025:
Q: Will tourism in the UK increase in 2025?
A: According to VisitBritain, international visitor spending is projected to reach £33.7 billion — a 7% increase from 2024.
Q: How can hosts prepare for fewer domestic tourists?
A: Focus on international guest acquisition, local partnerships, and flexible pricing strategies tailored to broader markets.
The Silver Lining: Positioning for Long-Term Growth
Yes, the economy is shifting. But where there is disruption, there is also opportunity. With international visitor spending projected to rise and the UK still ranking as a top global destination, property owners who embrace adaptability are well-positioned for long-term growth.
Smarhost provides the service backbone for this transformation. From automation to analytics, it empowers UK hosts to take control of their rentals, reduce overheads, and engage guests from across the globe.
This isn’t just about survival. It’s about using these economic headwinds as a tailwind to push your business to the next level.
Conclusion: Building Resilience in a Changing Market
The combination of global tariffs and domestic economic challenges has set the stage for a complex tourism landscape in 2025. However, the story is far from bleak. With inbound tourism projected to grow and services like Smarhost enabling smarter hosting, property owners have the tools they need to succeed.
By focusing on:
- Market diversification
- Flexible pricing
- Operational efficiency
- Local collaboration
- Strategic monitoring
…you can create a robust, future-proof business that weathers economic storms and continues to deliver exceptional guest experiences.
As the UK tourism market evolves, Smarhost will continue to support its community of hosts with the tools, insights, and partnerships needed to thrive. Whether you're a single property owner or managing a growing portfolio, adaptability is your greatest asset in 2025 and beyond.
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