The short-stay leisure market is expected to lead the recovery of the UK hotel sector post Covid-19 pandemic, according to new data from Knight Frank.
Knight Frank’s Hotel Dashboard – Covid-19 UK Hotel Market Recovery research showed that there is improving demand for UK towns and cities as leisure destinations likely during the winter period, where restrictions permit.
Demand for travel remains strong when it is safe to do so, as demonstrated by provincial hotels achieving a strong performance during the month of August, fuelled by robust domestic leisure demand, in the absence of international travel.
The price point and value proposition of the budget and select service hotels is expected to drive recovery in occupancy, whilst the resilience and out-performance of the serviced apartment sector is set to continue.
The pandemic has produced clear challenges for the sector, reflected in reduced TRevPAR volumes of approximately 55% for regional UK select and midscale hotels and a decline of 66% for full-service, upper and upper-upscale hotels in the regions.
However, there have been certain subsectors that have proven their resilience.
The aparthotel sector has outperformed the UK hotel market, achieving GOP (as a percentage of total revenue) of 34% as at September 2020 YTD.
Regional select-service properties have also proven their buoyancy, with GOP of 23% for the same period.
Karen Callahan, head of hotel valuations at Knight Frank, said: “Whilst the COVID-19 pandemic is having an unprecedented impact on the UK hotel market, it is also accelerating the growth in demand for both experience-led hospitality and the health and wellness sector.
“Whilst offering an opinion on how and when the UK hotel sector will recover remains highly subjective, in the absence of a global vaccine, with new tiered restrictions in place and whilst overseas travel to the UK also remains heavily restricted, the focus in the short-term remains one of survival. Learning to constantly adapt to the changing landscape is critical.
“We predict that the UK Staycation market will remain robust in 2021, as continued restrictions, confidence to travel and forward planning remains dependent on the control of the on-going pandemic. This will be crucial for the UK hotel sector’s recovery, which will be led by the short-stay, leisure market.”