When Might Things Get Back to Normal?
2nd February 2021
I have just published my latest ‘COVID-19: From Survival to Recovery’ update summarising the most recent research findings and commentary on how the UK hotel and visitor accommodation sector is being impacted by the pandemic. This latest update shows a less optimistic outlook for when things might get back to normal for the industry. While the positive news about the vaccination programme resulted in improved consumer confidence at the beginning of December, the news about the new variants of the virus and the third national lockdown and uncertainty about when it might be lifted, have impacted negatively on consumer confidence about travelling and taking holidays and breaks in 2021. Demand now looks likely to remain subdued until at least April. Market recovery looks increasingly unlikely to start before June and demand could remain depressed for most of 2021. Much will depend on the roll out of the vaccination programme and whether this translates into renewed consumer confidence to travel again. A full recovery is looking increasingly unlikely until 2022.
Predictions for 2021 point to:
- A strong recovery in staycations in rural and coastal destinations from the summer, assuming lockdown restrictions have been lifted by then;
- A slower recovery in city destinations;
- Stronger demand for non-serviced accommodation than serviced;
- Longer stays;
- Increased prices;
- A need for accommodation businesses to offer flexible cancellation terms in order to secure bookings;
- Greater use of contactless technology in the hotel and visitor accommodation sector;
- A need for accommodation businesses to provide reassurance that they are COVID-safe.
- A slow recovery in inbound tourism, especially from long-haul markets.
On a positive note, hotel and visitor accommodation development activity has continued unabated during the pandemic, with a spate of new openings planned in 2021 and hotel and visitor accommodation development schemes continuing to be actively progressed across the country. The hotel and visitor accommodation property market also remains buoyant, with sales being completed and agents continuing to take instructions. 2021 could see an increase in insolvent and distressed hotels and visitor accommodation businesses coming onto the market as a result of the pandemic. While these are positive indicators, stories of hotel and accommodation business failures as a result of the pandemic continue to emerge, and the hospitality industry continues to bear the brunt of COVID-related job losses.
Here is a link to the full report.
Andrew Keeling MTMI