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UK hotel sector could take four years to return to pre-pandemic levels

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The UK hotel sector could take four years to return to pre-pandemic levels, with hotel occupancy rates in 2021 set to remain flat at 55% across the country, new research has found.

The PwC’s UK Hotels Forecast 2020-2021 has found that trading performance is to decline ‘significantly’ next year as hospitality deals with the hangover from Covid, with occupancy rates for London at 52.4% and the regions at 59.2%.

This is assuming there will be a vaccine by next summer.

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Occupancy rates in 2019 were 83.4% and 75.4% respectively.

A slow recovery in corporate international travel and weak demand for business trips, meetings and events means the forecast is particularly bleak for London where the overall revenue per available room is forecasted to fall significantly in 2020 to £28.72, £100 less than in 2019.

With a vaccine, it is expected to recover to £64.81 in 2021 but in the long-term it’s unlikely that occupancy, ADR and RevPAR will return to 2019 levels until at least 2023.

The UK regions are expected to fare better than the capital in 2021, whether a vaccine is developed or not. A stronger staycation market will remain a fixture, whilst unpredictable overseas travel, ongoing restrictions and local lockdowns, will further fuel demand for domestic leisure tourism. 

Sam Ward, UK hotels leader at PwC, said: “As the UK travel and tourism sector bears a considerable brunt of the impact of COVID-19 this is far from business as usual. No previous event has had such a deep and long-lasting negative impact on hotels and there is no quick fix. The silver lining is that UK regions should benefit from increased staycation demand in 2021 and coast and country properties offer potential. Meanwhile the fall in corporate demand, coupled with the complete lack of sports and music events will see big city hotels suffer disproportionately.”

Tags : Datahotel sectorPwCRESEARCH
Zoe Monk

The author Zoe Monk

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