UK hotels affected by pandemic will need four years to recover, PwC says

According to forecasts published on Tuesday by the accounting firm PricewaterhouseCoopers (PwC), renewed lockdowns, the decline in foreign tourist numbers and the near disappearance of business travel have had a dramatic effect on hotels’ earnings.

In the bleakest outlook since benchmarking began, hotel occupancy rates in 2021 are forecast to be 55% across the UK.

“This is a stark reality for a once optimistic industry, which has seen a decade of growth post the global financial crisis and is a concerning trend for hotels and the wider hospitality industry,” said the report.

“Given the large number of uncertainties around Covid-19 restrictions, forecasting hotel trends is extremely challenging. The availability of a vaccine that can be quickly and widely administered is key to demand recovery coupled with consumer confidence to travel.”

Hotels in London, which rely heavily on international travel and the corporate market, will be particularly badly hit. Daily revenues per room in the capital have slumped to only £29 in 2020, less than a quarter of the £129 achieved in 2019.

However, some areas had benefited from the increase in domestic leisure travel. Ward cited costal and rural areas such as Bournemouth, Devon and Cornwall that had reported an increase in revenue per room as British holidaymakers opted to spend their money at home.