Hotel occupancy rates in London could
reach 70 to 90 per cent by the end of 2022, with a stronger figure of 87 to 96
per cent occupancy predicted for the UK’s regions.
The figures form part of PwC’s UK Hotels
Forecast 2021-22, which projects average daily rates of £112.26 in London – an
increase of £27.78 on 2021 but still well down from £153.07 in 2019 – and a
moderate increase across the regions to £67.05.
Average occupancy for the year in a
‘moderate rebound scenario’ is expected to reach 56 per cent in London and 63
per cent in the regions, rising significantly towards the year’s end.
The report noted that London’s luxury
hotel market continues to struggle while the mid and budget range has fared
better.
PwC’s forecast also stresses the
significance of business travel in hotels’ fortunes over the year ahead.
“The hotel sector recovery
has a long way to go,” said Sam Ward, UK hotels leader at PwC. “The speed of
recovery in the capital is likely to be dependent on international tourism and
the speed at which business travel returns as markets lift their own
restrictions on citizens travelling to the UK.
“Many businesses have
publicly stated their ambitions to cut business travel even as restrictions are
lifted. Hotels that previously focussed on the business market should think
about how to capture domestic tourism, looking at this as a real opportunity
and, as it returns, the international tourism market.”
The report says the hotel
industry faces a “perfect storm” of operational cost increases coinciding with
the increase in the rate of VAT in April.
“The ability for hoteliers to
endure these costs and preserve profitability will present a challenge in
markets where demand is weaker and more hotel rooms are available,” said Ward. “Recovery
will not be easy or straightforward, but with the right planning and strategy,
hotels across the UK can look forward to significantly better trading over the
next 12 months.”