British hotels facing bleakest outlook for 50 years

Hotel occupancy rates next year are forecast to be 55% across the UK, and could take four years to return to pre-pandemic levels, according to a new report.

PwC’s UK Hotels Forecast 2020-2021 report paints a gloomy picture for a sector, which it says has borne the brunt of the pandemic.

The forecast for occupancy rates in 2021 is 52.4% for London and 59.2% for the regions, assuming there will be a vaccine by next summer.

This is in comparison to pre-COVID-19 2019 occupancy rates of 83.4% and 75.4% respectively,’ the report states.

It does add that 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, according to PwC.

‘As the UK travel and tourism sector bears a considerable brunt of the impact of COVID-19 this is far from business as usual,’ said PwC’s UK hotels leader, Sam Ward.

‘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,’ added Ward.

‘Amid so much uncertainty, it’s imperative that hotels ready themselves for a difficult winter and act swiftly to demonstrate their adaptability. This is the time for hoteliers to look at their business model and find ways to cut costs. Those who can shift their focus to new customers, reorganise their operations and find innovative solutions stand the best chance of weathering the storm.’

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