UK hotels remain behind European recovery curve
UK hotels remain behind European recovery curve
22 JUNE 2020 8:34 AM

With the rest of Europe starting to open up, and with some other countries' nationals even flying on vacation, the United Kingdom remains behind the recovery curve.

LONDON—The United Kingdom lags the rest of Europe in large part because it is slower in reopening from the COVID-19 shutdown, said STR director Thomas Emanuel, who gave a video overview of U.K. and European hotel performance for the week of 8-14 June.

(STR is the parent company of Hotel News Now.)

The only part of Europe to retain enforced closures of hotels is the U.K. On 15 June, Germany and France announced the lifting of many restrictions, and the rest of the continent is largely aligned with the Eurozone’s two largest economies.

“Although (the U.K. remaining closed) is due to change on the 4th of July at the earliest, it continues to have a major impact on how the industry is performing,” he said.

U.K. metrics remain the same as in previous weeks, with Emanuel stating year-over-year daily declines in revenue per available room for the period of this week’s analysis of between 81% and 89%.

Emanuel said news reports coming out of Europe—for example, the first German tourists to fly for vacations to Mallorca, where hoteliers greeted them with applause—“show that (the U.K.) is certainly behind the curve.”

He added that hoteliers in the U.K. are crying out for more certainty and clarity.

Pipeline in the U.K. remains robust. If every announced project does open, supply across the country will increase by 23%, or approximately 160,000 new rooms. That represents “the largest pipeline of any European country,” he said.

The biggest segment in the pipeline is midscale, with approximately 40%, or 65,000 rooms, of likely supply. Across all segments, London leads the way with almost 45,000 of those 160,000 rooms, and it also leads European cities in terms of pipeline.

Liverpool (+72%), Plymouth (+63%) and Glasgow (+50%) lead in terms of percentage increase over existing rooms, with Emanuel stating “it will be very difficult for the market to absorb these rooms as well as face up to the challenges of the recovery of COVID-19.”

Many projects, he added, have downgraded their current status. For example, being moved from final planning back to planning.

“Sixty-six projects in London have been downgraded, whereas in 2019 there were only 15,” Emanuel said.

He added those downgrades will mean supply will be pushed into 2021 and 2022.

He said 160 projects have been abandoned altogether, 18 of them in London.

For more of Emanuel’s insights into U.K. performance data, please watch the video below:

Editor’s note: The video included in this article was filmed Thomas Emanuel, director at STR, on 17 June and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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