The United Kingdom’s hotel industry ended the summer on a high note, thanks to “a buoyant August,” according to Thomas Emanuel, director at STR, CoStar’s hotel analytics firm.
Across Europe, the United Kingdom is leading the way, “with occupancy has now settled for the last six weeks or so,” Emanuel said.
Across the country, occupancy throughout August and into the early part of September has reached the 60th-percentile range, with more than 70% occupancy achieved on weekends and Saturday nights seeing a premium even above that.
Leisure demand is the cause, and there might be some dips in the next few months that reflect children returning to school and the return of cooler weather. Business travel might also recover, now that many companies are seeing staff return to their offices.
Average daily rate in U.K. hotels also is showing more health, Emanuel said. The latest data shows ADR topping 100 pounds sterling ($135).
He added that with the exception of the weekend of Aug. 29, when revenue per available room increased above the average for 2019, RevPAR has been across the same period on average 25% below where it was pre-COVID-19.
In London, which like most major urban centers around the world has been hit hard during the pandemic, 40% of hotels now are showing occupancy above 75%. In the U.K.'s regional markets, the percentage of hotels that have achieved that metric is more than 70%, he said.
The lack of international visitation is still apparent in London’s occupancy numbers, he said.
A silver lining from the hotel performance data is that more than 40% of London hotels are achieving higher ADRs than in 2019, with that percentage being more than 80% in regional U.K. markets, Emanuel said.
“There is a very significant number of hotels which are greatly outperforming 2019 levels of rate, which is a very impressive data point to be able to bring you,” he said.
For the weekend ending Sept. 19, average occupancy across the U.K. was 67%, with Plymouth, Devon, being the highest achiever — as it has continued to be through much of the pandemic — with 88%.
Of the country’s four capitals, only Cardiff (76%) and Edinburgh (71%) saw occupancy above 70%, with Belfast and London posting 59% and 56%, respectively. The Republic of Ireland’s capital, Dublin, saw 48% occupancy in the same period.
“Looking at business on the books, there are two main takeaways," Emanuel said. "Firstly, we can see that the gap between London and the rest of the country is closing, and secondly that weekend peaks remain [in favor of regional markets.]”
He said all eyes would be on how corporate travel picks up during the fourth quarter, particularly as more employees return to offices in the cities, notably those in London.
Editor’s note: This video was filmed on Sept. 24, 2021, and edited and produced by CoStar Group.