by Sarah Cade
The economic effects of the pandemic have been felt deeper in hospitality than any other sector in the UK economy.
Over the last eighteen months, the hotel industry has found itself in an unprecedented struggle – with many forced to close their businesses. The leisure market has since shown tremendous spirit with many looking to adapt and better prepare for future challenges.
Following the lifting of restrictions in July 2020, the sector changed considerably – global travel was suspended, and hotel occupancy was struggling at an all-time low.
Does 2022 show signs of a rebound?
Autumn 2021 saw UK hotel occupancy rates reach 67.9% with frustrations following lockdown restrictions underpinning staycation demand. Although performance is not likely to return to pre-pandemic heights before Q4 2022, the emergence of the green shoots of recovery are there.
By the end of 2022, the forecast for the industry performance benchmark of revenue per available room (RevPAR) in London is anticipated to return to 43-86% of pre-pandemic levels. This figure is higher regionally, with a prediction of between 64-100%. The rate of recovery will be the major factor for the hotel industry sector in 2022.
But optimism doesn’t end with occupancy – global real estate firm, Savills, recently advised that investment in UK hotels is set for a solid 2022 with a forecast to reach £4.5 billion in transactions – which would see the industry beat a 15-year average of £4.22 billion.
In addition, there are promising indicators for tourism. When surveyed by PwC Research, 63% of people said they plan to take either more or the same number of holidays in 2022. This year has also seen above average number of new hotel openings in cities such as Bristol, Manchester, and Glasgow.
From the perspective of the consumer, despite the reinstatement of international travel, strict quarantine protocols and rising airline prices will make many holiday makers explore staycation options again this year.
The emergence of new COVID-19 variants may hinder the recovery to some extent, but there are already signs that the sector is progressing and possesses the flexibility, and insight, to remain on track.
In summary, there is room for huge optimism with signs that the hospitality sector is beginning to recover from the pandemic quicker than expected. With further reinforcement from emerging investment and consumer spending trends – the industry looks forward to a prosperous 2022 equipped with the learnings of the last two years.
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