The recovery of the United Kingdom’s hotel industry is continuing to pick up pace, according to the latest data from STR, CoStar's hospitality analytics firm.
Cristina Balekjian, CoStar’s director of hospitality analytics for the U.K., said hotel occupancy in April reached 73%, the highest level since the pandemic started, although demand remains most robust on weekends.
“Midweek demand has seen some strong improvements. Tuesdays and Wednesdays, which are typical corporate-led nights have seen a good uplift over the course of March, now surpassing the 70% mark and closing the gap between weekday and weekend demand,” she said.
Balekjian added this is helping push average daily rate.
“March saw some of the highest prices of this year as room rates reached almost 98 pounds sterling ($121), about 12% ahead of 2019 results,” she said.
One caveat is that inflation, which hit 7% in March, means real growth is much lower.
Investment in the sector also is rising, with deals including Tristan Capital Partners’ acquisition of Point A Hotels in May for 420 million pounds sterling and KSL Capital Partner’s acquisition of The Pig Hotels for an undisclosed price.
Cities Returning
Hotel performance in urban markets have caught up to the destinations that see more leisure travel, Balekjian said.
“Occupancy for most urban markets is now close to reaching their pre-pandemic results or exceeding them, with Leeds having an index of 100% of 2019 levels, while Newcastle is the out-performer as occupancy is four percentage points ahead of 2019 results in March,” she said.
She added hotel occupancy levels in London reached 70% in March, the first time it has done so since COVID-19 started.
She said that 2022 is the first year since 2019 with a full set of events on the calendar, the most notable being the Platinum Jubilee four-day weekend in early June to celebrate the 70th year of the reign of Her Majesty Queen Elizabeth II and the hosting of the Commonwealth Games in Birmingham in August.
For more of Balekjian’s insights, watch the video above.
Editor’s note: The video included in this article was filmed by Cristina Balekjian, senior hospitality analysts, United Kingdom, at CoStar, May 9, 2022, and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.