According to a study from PricewaterhouseCoopers (PwC), the United Kingdom’s hotel trading performance is expected to decline significantly in 2021, due to the effects of the coronavirus pandemic. In 2021, hotel occupancy rates across the United Kingdom are said to be at 55%.
It can take years before the situation gets back to pre-pandemic levels, the consultancy company said. This prediction is part of the 2020-2021 U.K. Hotels Forecast, analyzing the market conditions for hotels in the next year.
While there’s some relief to the drastic 2020 decline, the 2021 occupancy rate forecast is 52% for London and 59% for other areas, assuming that a vaccine will be available by next summer. Before the pandemic, in 2019, the occupancy rates were at 83% and 75% respectively.
The forecast is specifically bleak for London, due to slow recovery in international travel and low demand for corporate trips. The RevPar, or revenue per available room, is said to fall to £29 in the capital this year. That is £100 less than last year.
It is expected to recover to £65 in next year with a vaccine. However, in the long-term, it’s unlikely that RevPAR, average daily rate (ADR), and occupancy will return to the 2019 level. We need to wait until 2013 to see significant progress.
Whether there’s a COVID-19 vaccine or not, United Kingdom regions are expected to do better than London in 2021. There will be a stronger staycation market, while unpredictable local lockdowns, ongoing restrictions, and overseas travel will further fuel demand.
Sam Ward, PwC’s U.K. hotels leader, says that no previous event has this long-lasting, deep negative impact on hotels. There is no quick solution to this problem. As the tourism and travel sector bear the impact of the pandemic, the industry will be so far from business as usual.
According to Sam Ward, there is a silver lining, though. It’s the benefit that the UK regions can get from increased staycation demands. The country properties offer huge potential. On the other hand, the decrease in corporate demand, together with the lack of music and sports events, will make huge city hotels suffer disproportionately.
She warns that with so much uncertainty, it’s important for hotels to prepare for a difficult winter season, and demonstrate their adaptability. This is the time for many hoteliers to look for different business models and new approaches to cut costs. Read a lot more articles related to this matter on Quikmaps website.