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Domestic demand bodes well for hotel sector recovery

02 June 2020 by
Domestic demand bodes well for hotel sector recovery

The UK hotel sector's traditionally strong domestic leisure demand bodes well for the sector's recovery once lockdown measures from Covid-19 are fully lifted, according to a new report from global hotel consultancy HVS.

However, the report outlines that hotels in the capital and other gateway cities, with heavier reliance on international travellers and corporate bookings, are likely to take longer to recover than those in the provinces, which have a more domestic, leisure-based guest profile.

Overall, 60% of hotel demand in the UK comes from domestic sources. Around 50% of nights booked at hotels outside of London are from the domestic leisure market, rising to around 69% in the south-west of England, but only 29% of hotel bookings in London are domestic leisure bookings.

The HVS report shows that countries with a high domestic demand will be in a stronger position to recover once lockdown measures are lifted, particularly as international travel is curtailed. This may present an opportunity for strategically-minded and fast-acting hoteliers to capture at least some of this traditionally outbound demand.

Report author Stephen Collins, an associate director with HVS London, said: "One impact of lockdown is that British tourists will be keen to travel and, unable to go abroad, they are likely to book holidays in the UK once it's deemed safe to do so. This could prove a silver lining for UK hoteliers, holiday operators and campsites.

"This will help support domestic demand in the short to medium term, smoothing the recovery curve and allowing hotels to stay in business until the pandemic is brought under control and international demand begins to return.

"We are cautiously optimistic about the UK hotel industry's ability to recover at a reasonable pace compared with the rest of Europe, and to focus on domestic tourism until international demand returns.

"But it will not be smooth sailing and there could be casualties, particularly in areas reliant on international, corporate and MICE demand."

Undervaluing inbound tourism ‘will hamper the UK economy's recovery from coronavirus' >>

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Photo: Shutterstock

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