Hotel Forecast – repurposing assets to move with the times
- 29 Oct 2020
- Leigh Cowlishaw
I was keen to join the PwC session on the UK Hotels Forecast to see what they were predicting for the industry in the coming months.
The focus was on UK hotels and forecasts for trading for 2021. Unfortunately, the outlook is fairly bleak in terms of hotel occupancy amid the biggest downturn ever seen. Even if you combine all the previous recessions and world events, nothing comes close to the current trading conditions.
The rise in UK staycations over the summer created an upswing in leisure sales and this trend is expected to continue for 2021, however, it will not make up room occupancy levels and the dramatic decline seen in corporate sales. Stats for London show that there has been a massive impact and as this is the location most booked by our members, they will have experienced this themselves; rates are going to take time to recover.
Understanding new data sources will be key – reading the sentiment in the market, surveys, government policies, social media emotions all need to be understood and the industry’s marketing tone will need to adapt accordingly.
From the hotels’ perspective, clearly, it will be about liquidity, but I think that some of the other messages that came across would resonate for all businesses:
- Adapt quickly and react to changing policies, sentiment, and mood
- The market will move before you have had time to consider your marketing strategy. We work with many accommodation providers and with this in mind, our joint marketing activity for next year is designed to be flexible
How do you replace the dislocation of corporate travel?
- Think differently: with fewer businesses in their office locations, could hotels provide meeting space for corporates? Perhaps there is more opportunity to have ‘collaborative’ meetings off-site in a hotel. This is something our TMC members are supporting their clients with as they are ideally placed to identify suitable venues offering Covid-secure meeting spaces.
- Off-site events may become more prevalent – if working from home becomes a permanent trend, hotels can repurpose their assets to offer shared/meeting/office space as a short-term alternative to office space.
- Under-invested hotels are likely to be hit more harshly as, with less demand, there will be more consumer choice. Offering higher quality and better service will be key
- Covid-19 is a catalyst for change to re-imagine how supply chains can work smarter together
- Hotels will be keen to shift distressed inventory if they can – this is where our new ‘lite’ rate code, WLW, comes into play very well, helping accommodation providers, the TMCs and travellers
I know our TMC members are continually working on how to best support the business needs of their corporates in terms of off-site meetings, providing clarity on Covid-secure protocols whether for overnight stays or meetings in the future, such as being familiar with best practices of their preferred suppliers.
You can see the report here: pwc.co.uk/industries/hospitality-leisure/insights/uk-hotels-forecast
Leigh Cowlishaw is Global Supplier Director of Advantage Travel Partnership.