BUSINESS NEWS
UK hotels recover rapidly since May 17 reopening
Ian Taylor
The UK is leading the hospitality recovery in Europe with a rebound faster than in China or the US, according to hospitality data analyst STR. Robin Rossmann, STR managing
director, described the hospitality performance across Europe in May as “bleak” but hailed the UK as “unbelievably good” following an easing of restrictions from May 17. Rossmann said: “Seven-day
occupancy for open hotels reached 60%-65% in the UK in the space of two to three weeks. Europe is still bumping along the bottom, just at the beginning of things recovering.” The only other market to perform
close to the UK level was Portugal with occupancy just over 40% in early June. Occupancy in the week to June 6
across all UK hotels, including those not even open, was 55%. Average daily room rates in the UK were just 20% down, suggesting the recovery “was not at the expense of room rates”, Rossmann said, insisting: “It’s remarkable how quickly UK
Business travel ‘will recover but with a haircut’
Industry analysts have dismissed claims that corporate travel will fail to return to its former levels, but Credit Suisse’s Neil Glynn warned of a delay and “a significant haircut” to internal company travel.
travelweekly.co.uk Robin Rossmann
occupancy has recovered compared to the US and China. Most of Europe is struggling at 10% to 20% occupancy, [although] the Spanish islands are doing a little better. “The UK is far ahead for business
on the books through the whole of June. We see no pick-up yet in Europe, except in Spain which starts to pick up in July. The Canary Islands and Balearics have good business on the books for July and August. The rest of Europe only picks up from August.” However, he suggested: “There
is significant room for change in the next two to three weeks. Demand came through last summer when we
were in a much worse position.” STR reported the UK regions
doing “much better” than London, with overall occupancy 25 percentage points ahead of the capital, and forecast the regions would outperform through to the end of August thanks to weekend leisure demand. Rossmann added: “Room rates
are recovering faster than expected – in the upscale sector to 90% of pre-pandemic levels.” The recovery at the upper end of
the market is borne out by average daily rates in China, which are “back at 2019 levels”, and in Dubai, where luxury rates are “trending above 2019”.
‘State support for airlines holds back sector’s recovery’
A senior Iata figure has warned that a lack of failures among weaker airlines risks delaying a post- pandemic recovery. Outgoing Iata chief economist
Brian Pearce pointed out 2020 “was a normal year for airline failures despite traffic being 94% down” and said: “It’s crazy. We’re not seeing an adjustment to the incredible shock Covid has been.” Pearce told a Capa Centre for
Aviation summit: “We should see stronger players getting stronger and weaker ones going out of business, but we’ve seen barely any failures be- cause governments have stepped in.” He insisted: “We need to see
consolidation. [But] my fear is governments will be reluctant to let weaker carriers go. “That means it will take stronger
carriers longer to break even and make recovery much slower.” Pearce warned: “The debt
burden is massive and unsustainable. Airlines are going to want to put on any route that generates cash. [But] keeping the cost base under control is going to be a challenge when suppliers are looking to recoup their losses and oil and fuel prices are back to pre-crisis levels.”
2022 will be ‘transitional’ for business sector
some time what 2022 will look like. There is a need for people to return to offices first. [But] I struggle to think travel budgets will go from almost zero to 100% in one fell swoop. So 2022 will probably be transitional.” He noted a lot of forecasts
Speaking at a Capa Centre for
Aviation summit, managing direc- tor Glynn said: “It won’t be clear for
“converge around a 15% reduction in corporate travel” and predicted “a very significant haircut to internal [company] travel where there are alternatives”. However, Glynn argued:
“External travel probably represents two thirds-plus [of the market] and most of that will recover given the way most business is done, the way revenue is generated and the competitive nature of most sectors.” Richard Clarke, managing
director and hospitality analyst at AB Bernstein, pointed out: “There were predictions of the death of business travel in 2009. We may see some change but overall things will recover pretty much to where they were.”
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