In conversation with Hugh Taylor OBE: Chief Executive of Michels & Taylor

Hugh Taylor OBE is the Chief Executive and one of the co-founders of Michels & Taylor, a hotel management company, investor support business and advisory company, working with some of the most well-known hotel brands in the world.

He has over 30 years of experience working within the hotel industry and was awarded an OBE for his services to tourism and hospitality. Here, Anthony Hunt sits down with Hugh Taylor OBE to discuss how the hotel industry has changed since founding M&T, how hotels are reacting to rising costs and sustainability demands, and what the future might hold for the sector at large.

Since setting up Michels & Taylor over 15 years ago, how has the hotel industry changed?

The industry has changed dramatically. If you go back further, say to the late 1980s and 1990s, major hotel companies like Hilton and Marriott typically owned and operated their hotels outright. They carried the capital burden, controlled the operations, and retained all profits.

That model started to shift in the early 2000s, when companies began franchising and selling off assets. For example, Hilton divested billions of pounds’ worth of hotels and transitioned into a brand-led company.

Today, global hotel companies own very few properties themselves – Hilton, for example, only owns a handful out of more than 5,000. Their focus is no longer real estate, but brand licensing, reservation systems, loyalty programmes and management or franchise fees.

As a result, the real clients of hotel companies are no longer guests alone, but the owners themselves, who are investors ranging from private equity firms and hedge funds to family offices and individual proprietors. Many of these investors don’t operate the hotels themselves; they rely on brand partnerships and often outsource day-to-day management to white-label operators like us.

Over the last 15 years, this model has proliferated in the UK and Europe. Franchising combined with third-party management has become the most popular structure because it gives owners more control, improves the pool of potential buyers when selling an asset and provides flexibility compared to traditional long-term management agreements with global hotel companies.

Another major shift has been brand expansion. When I was at Hilton, there were just two brands: Hilton and Conrad. Now Hilton has more than 20 brands, covering every segment of the market – from budget and limited-service to lifestyle, luxury and everything in between. Marriott, IHG, and others have followed the same path.

This proliferation of brands has allowed global hotel companies to expand aggressively into new markets and capture demand across all tiers of hospitality.

You manage the portfolios of some of the biggest hotel brands including Hilton and Marriott, how do you tailor your hotel management approach across branded versus independent properties?

From a management perspective, branded hotels benefit from global distribution systems, brand recognition, sales and marketing resources, and structured operational support. These can significantly boost occupancy, especially on the rooms side.

However, the cost of putting a ‘flag on the door’ is high – not only in franchise and management fees, but also in meeting brand standards, supplier restrictions and operational requirements.

Independent hotels, by contrast, must create their own distribution channels and presence in the market. While they lack the global reach of a brand, they gain full flexibility and control. Many independents remain so because the additional costs of branding would outweigh the revenue uplift. Ultimately, the decision depends on whether the brand’s systems and reach justify the cost for a given property.

How do you balance the need for profitability with sustainability goals, especially in light of rising utility costs and ESG expectations?

Rising energy costs have been a huge challenge. For example, I know of one hotel whose annual energy bill jumped from £300,000 pre-Covid to £1.2 million, effectively wiping out its profit.

Sustainability measures, however, are both socially responsible and commercially beneficial. Guests increasingly value them, and over the long term, sustainable energy management reduces costs. While upfront investment can be high, efficiency gains make it worthwhile.

You recently launched an EV charging network across your hotel portfolio, how do you see this helping to drive growth?

There is no question that hotels need to be better prepared for the growth of EV. Our guests are asking for it all the time. The lack of nationwide charging points creates anxiety for travellers, so hotels offering reliable charging facilities meet a real need. This enhances guest satisfaction and keeps our properties competitive as EV adoption grows.

What role does technology play in helping to streamline operations and enhance guest experience?

When I started in this industry, it was the pre-Internet era, so you can imagine how much change I’ve seen. Technology has transformed hospitality – from online distribution to digital check-in and QR code room service.

There are a whole load of things it brings to the party and makes easier. It improves efficiency and the guest journey, but it also requires constant investment. The thing I’m looking most closely at is AI. IT spend is relentless; as soon as you implement one system, another comes along. While it delivers significant benefits, technology remains one of the heaviest ongoing capital burdens for hotels.

What specific innovations or strategies has Michels & Taylor adopted to stay ahead in a post-pandemic, inflation-sensitive market?

There are lots of things we’ve done to recognise this new world. As you point out, the costs of operating a hotel have significantly increased since Covid. We’re seeing many hotels in the mid-market that are being significantly squeezed by budgets.

That’s where profitability becomes a major problem. The government’s decisions on National Insurance and minimum wage increases have been hugely unhelpful too.

So, we’ve introduced multiple operational efficiencies. For example, replacing traditional room service with QR code ordering, moving to refillable dispensers instead of individual toiletries, and reducing staffing levels where appropriate.

In some hotels, such as the Hampton by Hilton in London, we’ve replaced minibars with convenient ‘grab-and-go’ pantries, which are easier to manage and more profitable. These measures help us balance guest expectations with rising operating costs.

Looking ahead, what do you see as the next major disruption in the hotel industry, and how are you preparing for it?

I think our industry has been battered in recent years, first through Covid, and then through the rising cost of energy, and now the government’s budget raid on National Insurance and payroll. It’s so difficult to operate efficient hotels that make profit today.

Beyond technology and sustainability, another potential disruption could come from the government’s handling of asylum hotels. Around 35,000 UK hotel rooms are currently occupied by asylum seekers. If those return to the open market suddenly, it will flood supply and push down rates, especially in areas like Heathrow.

Some hotels may even struggle to reopen due to cost burdens. This could reshape parts of the industry.

Want to learn more about the outlook for the hospitality industry? Download our latest On the EDGE: Hospitality trends in 2026 report.