The UK is full of former holiday destinations. Seaside towns and rural villages that once thrived on domestic tourism but gradually lost out to cheaper overseas breaks. Package deals to Spain, Greece, and Turkey hollowed out the coastal economies that had sustained generations of hoteliers, publicans, and guesthouse owners. Nowhere has this shift been felt more acutely than in the South West of England, across Somerset, Devon, and Cornwall, where the legacy of that golden era still lives in the fabric of the buildings, the character of the towns, and the families who have kept the lights on.
But here’s the thing: the South West isn’t a story of decline. Not entirely. It’s a story of missed potential. And for the family run hotels at the heart of these communities, the challenge isn’t that people have stopped coming. It’s that the world around them has changed, and many haven’t changed with it.
Part One: The South West, A Complicated Success Story
According to Visit Britain data, the South West is the UK’s number one region for overnight stays. In 2024, it recorded 49.1 million overnight stays, 19% of all domestic overnight stays in the country, with an average trip lasting over three nights. That puts it ahead of London, the North West, and the South East by a significant margin.
On paper, that’s a remarkable position. But the headline figures don’t tell the full story.
The South West’s share of overnight trips has been declining. In Q3 2022 and 2023 it held a 20% share; by 2024 that had slipped to 18%, and by Q3 2025 it was down to 16%. Visitors are still coming, but in fewer numbers, and the nature of those visits is shifting. Large towns and cities have increased their share of domestic overnights from 44% in 2022 to 46% in 2024, while seaside and small town destinations, the heartland of the South West’s offer, have seen the sharpest declines.
Take the South Hams in South Devon, a beautiful stretch of coastline and countryside running from the edge of Dartmoor to the sea. Towns like Salcombe, Dartmouth, Totnes, and Kingsbridge are busy, affluent destinations in the summer months. Yet South Hams ranks only fifth in Devon for overnight stays and spend, behind Torbay, North Devon, East Devon, and Plymouth. It does, however, have the third highest number of day visitors, a pattern that suggests either a lack of quality accommodation at the right price point, or simply not enough of it to capture the demand that clearly exists.
Within South Hams there were 374,000 trips in 2023, totalling 1.78 million nights and generating just over £105 million in spend. Self catering dominates at £46.4 million, with an average stay of 6.26 nights. Serviced hotel accommodation sits second at £19.5 million, but with a much shorter average stay of 3.15 nights. Camping, staying with friends, and second homes fill out the rest. In Salcombe alone, 45.3% of all housing stock is either a second home or a holiday let.
The region has demand. It has landscape, heritage, and culture. What it lacks, in too many places, is the right hospitality product. High quality, affordable, and rooted in the character of the place.
Part Two: The Pressures Closing In
The South West’s challenges are a concentrated version of what family run hotels face across the UK and, frankly, across the world. Legacy hotels, independent, often multigenerational, frequently undercapitalised, make up the vast majority of hotels globally. But they are losing ground, and the pressures are coming from every direction.
The Airbnb effect. The explosion of short term lets has fundamentally altered the competitive landscape. Platforms like Airbnb offer guests flexibility, perceived value, and the feel of a local experience, often at a lower price point than traditional hotels. Regulation is tightening, with mandatory registration schemes, planning permission requirements, and the abolition of the Furnished Holiday Let tax regime from April 2025, but the damage to traditional accommodation providers has already been done. In communities like Salcombe, the saturation of holiday lets has driven up housing costs and reduced availability for locals, while simultaneously fragmenting the market for serviced accommodation.
New development and branded competition. Let’s be clear: branded and franchised hotels are not the villain of this story. They are, in many ways, the benchmark. They drive up standards, invest heavily in guest experience, and set the bar for what modern travellers expect. They have better marketing, better operational systems, stronger distribution, and dedicated support teams. That’s not a criticism, it’s a reality. But when a new, purpose built branded hotel arrives in a market with fresh fitouts, modern systems, and the distribution power of a global reservation network, it inevitably puts pressure on the legacy hotel down the road with 15 rooms and a tired reception area. The question for the independent operator is not how to beat the brands at their own game, but how to offer something the brands cannot.
Rising costs. The UK hotel sector is under sustained financial pressure. Energy costs for hotels have doubled in four years. The Autumn Budget 2024 is projected to add £3 billion per year in additional tax burden to hospitality businesses. The 2026 business rates revaluation will see rateable values for hotels rise by an estimated 76% on average. Labour costs continue to climb, with further minimum wage increases due from April 2026. The Employment Rights Act 2025 is reducing workforce flexibility around zero hour contracts and variable rotas. For family run operations already working on thin margins, each of these hits harder than the last.
The generational problem. Family run hotels have, by definition, been passed down through generations. But those who inherit don’t always have the knowledge, the appetite, or the capital to modernise the asset. The building ages, the systems fall behind, the investment dries up, and eventually the property falls into the hands of private equity or a brand, if it hasn’t simply closed.
And many in the industry would say, thank heavens for that. Without private equity and institutional investment flowing into UK hospitality, the quality and standards across large parts of the sector would be far poorer than they are today. The capital has to come from somewhere, and when families can no longer provide it, outside investment is often the difference between a hotel that thrives and one that quietly dies. The challenge is not that this investment exists. It is that too many legacy operators find themselves with no alternative to it.
I’ve visited thousands of these hotels over the years, and they tend to fall into three camps.
The first is tired and run down. Not just in bricks and mortar, but in culture. Poor systems, unmotivated staff. The sort of place where the receptionist ignores the guest for two or three minutes while they finish a task, or disappears to the back of house just as someone walks through the door. The weariness of the building is reflected in the weariness of the team.
The second is the opposite. The asset may be dated, but it is spotlessly clean and immaculately run. A brilliant general manager who understands hospitality, who gets the best out of their team, and whose warmth and attention to detail mean the property consistently outperforms its physical limitations.
The third is the rare case where the owners have been able to access capital to modernise. To invest in the rooms, the food and drink offer, the technology, the guest experience. These properties are few and far between, but they prove what’s possible.
Part Three: The Way Forward. Standing Out, Not Stepping Aside
So where does that leave the legacy hotel? Is it simply a matter of time before they all hand over the keys to investors or branded operators?
Not necessarily. But survival requires a clear eyed view of the landscape and a willingness to do what the big players find hardest.
Family run hotels have something that no franchise, no private equity fund, and no new build development can easily replicate: they are of their place. They know their community. They know the local producers, the hidden walks, the stories behind the buildings. They can offer the kind of hands on, tailored, culturally grounded experience that larger operators find problematic and harder to deliver at scale.
This is their competitive advantage, but only if they lean into it properly.
That means being exceptional at the niche product. It means curating genuine local experiences. Not a laminated card on the bedside table, but a real connection between the guest and the place. It means working with local suppliers, hosting events that bring the community in, and creating the kind of warm, personal hospitality that guests remember and return for.
But, and this is the critical point, none of that matters if the basics aren’t right. A charming host and a beautiful location won’t compensate for a lumpy mattress, a weak shower, a clunky booking system, or a breakfast that hasn’t changed since 1997. Legacy hotels need to provide the level of service, comfort, and operational efficiency that the big players do. Clean rooms, great beds, reliable technology, responsive communication, and a team that is trained, motivated, and empowered to deliver.
The hospitality industry is entering a phase of consolidation. Occupancy is levelling off, margins are tightening, and revenue growth is increasingly dependent on maintaining room rates rather than filling more beds. In this environment, the hotels that thrive will be those that combine authenticity with excellence, that offer something meaningfully different while meeting every expectation a modern guest brings with them.
The good news? There is a growing appetite amongst travellers for exactly this kind of experience. Guests are increasingly looking beyond the consistency of branded hotels and seeking out places with character, local identity, and a sense of community. Hotels that serve as genuine “third spaces”, blending high quality food and drink, authentic local character, and social connection, are precisely what the market is asking for.
The family run legacy hotel is not an anachronism. It is, potentially, the future of hospitality, but only if its owners are willing to invest, to adapt, and to hold themselves to the highest standards while staying true to the character and community that make them irreplaceable.
The choice is stark: hand over the keys, or become exceptional at the thing only you can do.
This article draws on Visit Britain domestic tourism data (2024), South Hams District Council visitor statistics (2023), PwC UK Hotels Forecast 2025 to 2026, and the Sibley Grove Hotels executive summary.
