Second UK lockdown hurts hotels in run-up to holidays
Second UK lockdown hurts hotels in run-up to holidays
25 NOVEMBER 2020 9:43 AM

Advances in COVID-19 vaccines and an extended shoulder season for rural and seaside hotels offer hope for the U.K. hotel industry, but the picture remains far from rosy as the country gets set to end its second lockdown on 2 December.

LONDON—England is set to end its month-long second lockdown on 2 December, 30 days of restrictions that have not been positive for the hotel industry, according to Thomas Emanuel, director at STR, the parent company of Hotel News Now.

The other three constituent nations of the United Kingdom—Northern Ireland, Scotland and Wales—already had some form of restrictions implemented by their governments that also contributed to the overall decline in hotel performance throughout the country.

Emanuel said each of the key performance metrics for hotels—occupancy, revenue per available room and average daily rate—softened in November.

“ADR did appear to have levelled off at around 30% below 2019 levels. However, that has increased as we have moved into this second lockdown, and last week ADR was 44% lower than last year,” he said.

“Daily declines last week (of RevPAR) were between 75% and 86% below 2019.”

He added results are likely to continue to be sobering, with further declines expected from the second lockdown.

There were some brighter spots in terms of occupancy in October. Inverness, Plymouth and Bristol hotels reported occupancy for the month of 69%, 63% and 59%, respectively.

At the other end, Belfast, the capital of Northern Ireland, and Cardiff, the capital of Wales, both recorded occupancy of only 19%. The two cities and their respective countries were in tightened lockdown during the month, whereas England’s equivalent lockdown did not start until November.

Emanuel said the declines are largely “the case of cities still missing corporate, group and international visitors, and sadly none of these demand drivers seem to be returning imminently.”

Summer extended
A positive note, he added, is that rural and seaside destinations, which held up somewhat in the summer, enjoyed an extended shoulder seasons due to the mid-term school holidays and “working-at-home” guests having flexibility.

Several regions in October reported occupancy in the mid-70th percentile, Emanuel said.

Across the entire U.K., hotel occupancy has reverted back to a pattern visible during the first lockdown, with higher demand on weekends but demand for weekdays effectively switched off.

Emanuel said that while some hotels do have bookings at Christmas and for New Year’s, business on the books going into January remains very muted.

The U.K. government is likely to announce that families can mix at Christmas to some small degree, and this might see a few additional bookings for hotels.

News of several vaccines showing positive medical trial-outcomes provides the greatest cause for celebration during these very challenging times, Emanuel added.

Editor’s note: The video included in this article was filmed by Thomas Emanuel, director at STR, on 23 November and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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