According to PwC, a consultancy firm, due to the impact of COVID-19, the UK hotel trading performance is estimated to decline massively in 2021. Hotel occupancy rates are set to be 55 percent across the UK next year. This is the lowest since the occupancy rates have been recorded from 1970.
PwC argued that it could take four years to return to pre-pandemic levels
These predictions are a part of the UK Hotels Forecast 2020-2021. This forecast anaylses the market conditions for hotels over the next one year.
Assuming there will be a vaccine in 2021, the prediction for occupancy rates in this year for London is at 52 percent. For other regions, it is at 59 percent. This is quite low when compared to the pre-COVID-19 occupancy rates of 83 percent and 75 percent respectively.
Given that corporate international travel and the MICE market will recover quite slowly, the forecast looks pretty bleak for London.
The total revenue per available room (RevPAR) is predicted to fall significantly to GBP 29 in the capital this year. This is around GBP 100 less than in 2019.
With a vaccine in place, these numbers could recover to GBP 65 in 2021. However, it is only till 2023 that the ADR (average daily rate) and RevPAR will return to 2019 levels.
Ongoing restrictions and lockdowns will fuel demand for domestic leisure tourism
Sam Ward, UK Hotels Leader, PwC, said, “The UK tourism sector bears a considerable brunt of the impact of COVID-19. 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. Coast and country properties offer potential. However, the fall in corporate demand, along with the complete lack of sports and music events will see big-city hotels suffer massively.”
Ward added, “Amid so much uncertainty, it’s imperative that hotels ready themselves for a difficult winter. Hotels need to act swiftly to demonstrate their adaptability. This is the time for hoteliers to look at their business models and find ways to cut costs. Hotels need to shift their focus to new customers and reorganise their operations. They need to find innovative solutions and only then will they stand the best chance of weathering the storm.”