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London hotels lag behind with lack of tourism and lowest UK occupancy

11 August 2020 by

While rural operators are benefiting from the staycation boom, London hotels continue to see the lowest occupancy in the country with an average of 25%, according to analyst STR, and some properties at 10% or less.

For the week 27 July to 2 August, although occupancy levels for hotels across the UK were seeing week-on-week improvement and weekend peaks, director at STR Thomas Emanuel said that London in particular was noticeably "the laggard".

While occupancy during weekends in London has recovered ever so slightly, there has been no weekday improvement, with the lack of corporate and MICE (meetings, incentives, conferencing and exhibitions) demand, continued closure of attractions and loss of tourism hitting the capital hard. A significant number of properties remain closed.

Michael Shepherd, general manager of the five-AA-star, 453-bedroom London Hilton on Park Lane, said London's hotel occupancy levels are not picking up due to the quarantine restrictions on its main markets, the Middle East and US. His hotel is seeing occupancy of less than 10%.

"The fact is that in London there is no activity," he told The Caterer. "We are dependent wholly on travel, and people are not travelling into London."

He said that London hotels also need advice from the government on events: "We need an understanding and direction on events, so at least we can speak to event organisers to say ‘this is what we can do and this is what we can't do'… If we don't get direction on that, it will be cataclysmic moving into next year."

The property is in consultation about how many staff it will be able to sustain.

UKHospitality has described the loss of inbound tourism, leisure and business travel in London as a "triple whammy" for hospitality. In an open letter to the mayor of London, Sadiq Khan, UKHospitality chief executive Kate Nicholls called for more support for hospitality businesses in London as well as "clear, strong messaging" that London is open, with visitors actively encouraged to support the capital's venues.

Jannes Soerensen, general manager of the five-AA-star, 73-bedroom Beaumont hotel in London's Mayfair, and chair of the W1 Group of 29 hotels, agreed that the capital needs more promoting "to reboost and re-energise London as a destination".

The hotel has not yet reopened as 80% of its guests are international: "It's just literally a matter of having enough clients that are able to travel to justify reopening," said Soerensen.

He said government support had been "crucial and saved a lot of jobs" but is advocating an extension of the business rates holiday, the VAT cap and employment support for the industry, "to ensure that the job retention scheme doesn't become a waiting room for redundancies".

Stuart Procter, chief operating officer at the five-red-AA-star, 107-bedroom Stafford hotel in London's St James's, highlighted the contrast between the group's four-red-AA-star, 26-bedroom Northcote hotel in Langho, Lancashire, which is operating at 91% capacity, compared to just 10% at the Stafford.

Meanwhile, The Sunday Times reported that the Edwardian Hotels group, which owns and operates the May Fair hotel in London, is the latest to enter redundancy consultations with staff, with around 1,200 job losses possible.

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