United Kingdom hotel performance remains weak, in large part due to the government’s continued guidance that hotels remain closed until May 17 — a date that could shift if the pandemic becomes worse.
Future bookings have picked up for that date and afterwards, but for now hotel occupancy remains flat.
“For those hotels open and operating, occupancy during the week is in the low 40s percentage-wise, while weekends fall into the high teens or low 20s,” said Thomas Emanuel, director at STR, CoStar’s hospitality analytics firm, referring to data for the week ending March 21.
As of March 29, the stay-at-home order has been lifted in London, although the government recommends against unnecessary journeys. On April 12, hotels and other hospitality businesses will be able to serve diners in outdoor facilities. No international inbound or outbound travel is permitted until at least June 21.
“Until we see restrictions lifted we are not likely to see these numbers change,” Emanuel said.
For the week ending March 21, year-over-year occupancy rose for the first time since the pandemic began, up 30%, but that is only because the U.K. has now reached the end of the first week of its second year of lockdown.
“This is, of course, not an increase as such,” he added. “It is certainly not an anniversary to celebrate.”
The year-over-year decline in average daily rate is 36%, he added, and while average hotel occupancy across the country rose to 32%, the increase is not of real significance.
Emanuel said that midscale and economy hotels are at higher occupancies than luxury hotels and that gap is gradually rising. Luxury hotels posted 7% occupancy in STR’s latest figures, and midscale and economy hotels averaged 44% occupancy.
Israeli Inspiration
The vaccination rollout in the U.K. is going well, with at press time more than 50% of the adult population now having had at least one of the two prescribed doses.
That brings hope, Emanuel said, if the experience of Israel is anything to go by. More than 50% of Israel's population has received both vaccinations and its hotels have subsequently experienced a notable rise in occupancy, albeit all domestic.
Editor’s note: The video included in this article was filmed by Thomas Emanuel, director at STR, on March 25, 2021, and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.