*written by Assured Hotels
With the re-opening of the country well underway, sustained by the pace of vaccination programme and suppression of the virus, confidence continues towards more normal trade by the summer. However just because we can trade is the demand sufficient. Whilst plans for the 4 nations differ slightly with England set to move to step 3 on the 17th May, domestic leisure demand is looking buoyant, but it isn’t the same across the board.
With the various dates yet to be confirmed this general good vibe is already driving significant growth in bookings in leisure locations, so in the second of our demand reports we will be using SiteMinder’s World Hotel Index tool to update on some detail from:
As a more meaningful target for recovery all current booking trends are compared to 2019 actuals, as we are all too aware 2020 from April was severely damaged by tough lockdown restrictions.
UK compared to the Rest of the World.
Booking Momentum – table below compares daily booking made as a % of 2019, looking at the UK against the Global consolidated figure.
Observations: we can see that before and immediately after the crash in March 2020 the UK tracked the RoW on daily bookings momentum. Subsequent lockdowns and restrictions led to the UK falling well behind global pace, as far as a 25% gap in February this year (UK 10% of 2019, RoW 35%). The gap is now 8% as of Monday 26th April, albeit still around 50% down on 2019.
So, with the UK recovery already well underway, we believe crucially this time sustainable for all the good reasons we are aware of. Whilst the momentum figure is still low it is being driven largely by domestic leisure stays post the 17th May, and with little of the normal contribution from business and international travel markets. Positively for the UK, 48% on Monday 26th April compares very favourably to France at 23% and Germany at 16% of 2019 volumes.
UK business mix, International and domestic
Away from leisure markets across the high season there is still risk, whilst the UK can rely on a strong domestic market, business recovery pace is still uncertain and international travel restrictions look like getting tougher in the medium term. This will therefore continue to have a huge impact on town, city and airport locations.
Forecast summer/ autumn 2021 by international and domestic mix – makeup of domestic and international arrivals.
Observations: June 2021 shows just 6.4% of hotel arrivals will be international travellers, when the same month in 2019 was 30%, which was about the level achieved across the months shown above 2 years prior. This harsh reality of border control is now reflected in this forecast barely getting above a 10% contribution, when the last update showed expected growth to over 20% by the autumn in SiteMinder’s February data.
Town vs. Country & Seaside
Whilst the risk to a quick return to historic trading levels still exists from this lack of business certainty and overseas traveller markets, which will impact all UK locations to varying degrees, its clear that we cannot just give away the hard earnt success in combating the virus over the winter. Once nations are aligned it’s expected that over the summer months more travel corridors will allow the slow return of unrestricted travel and re-open these important markets.
Looking in a bit more detail the comparison in the table below highlights the challenge for bigger business & gateway cities like London, against a “best of both” like Edinburgh and pure leisure in a coastal location like Bournemouth.
Booking Momentum by City –table below compares daily booking momentum as a % of year prior, taking three popular but very different destinations – Edinburgh, London & Bournemouth.
Observations: a continuation of the trend seen in 2020 and since the roadmap announcement in Feb ‘21 with Bournemouth as an example now only achieving 75% of 2019 daily bookings; however we believe that the drop in daily leisure location bookings could be an opportunity for the traditionally business dominated towns and cities.
We are aware from more detailed venue specific data that the drop in bookings pace at Bournemouth to 76% (March was pacing at close to 90%), which is mirrored in Brighton at 71% for example, is due to these locations getting close to saturation. Therefore, even when international travel starts to ease, we are confident that the domestic leisure demand will continue so that the city locations with something to offer can benefit from an overspill of more short break staycations. Its therefore a question of packaging and pricing to ensure a market share is achieved through the right marketing and distribution channels.
With our partners and their access to platforms with more granular detail we can drill down further to establish demand and rate expectations for any UK location. This data will allow management to establish the right offer and price, and to give credibility in forecasting by hitting targets and drag back lost value and confidence.
Supporting Stakeholders – meet with us on a no obligation basis
In direct response to ongoing challenges faced by the hotel & hospitality sector Assured hotels will be offering no obligation meeting time to sector stakeholders.
We will be providing access to our senior team to discuss any challenges. We have made our significant experience and resources available without charge for an initial review in all main disciplines of finance & forecasting, procurement, sales and revenue management, plus funding and government support access. We will endeavour to answer any question raised, so please click here to book a meeting email firstname.lastname@example.org or call 0203 205 7239.