News: Strong domestic demand may offer salve to UK tourism sector

The UK hotel sector’s traditionally strong domestic leisure demand bodes well for its 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. 

Many hotels outside London typically generate over 50 per cent of domestic room nights from holidaymakers.

In the south-west of England, for example, holidays account for 69 per cent of domestic room nights, compared with London, where some 29 per cent of hotel bookings come from domestic leisure bookings.

The HVS report shows that across Europe those 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.

ADVERTISEMENT

Overall 60 per cent of hotel demand in the UK comes from domestic sources, a similar proportion to France (63 per cent) although not as high a proportion as Germany at 82 per cent, although much of this demand is generated from trade fairs and events, which are likely to take longer to recover, and the Nordics, which averages at 71 per cent.

Much of southern Europe has a lower percentage of domestic tourism, with Portugal at 34 per cent and Italy at 50 per cent, which will result in a slower recovery for their hotels unless they are able to attract foreign visitors when circumstances permit this.

“One impact of lockdown is that British tourists will be keen to travel, and unable to go abroad 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,” commented report author Stephen Collins, an associate director with HVS London.

“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.”

The report warns that the fact UK tourists are unlikely to travel abroad this summer will also have a big impact on countries such as Spain, Portugal, France and Iceland, with heavy reliance on British holidaymakers – however, this may present an opportunity for strategically-minded and fast-acting British hoteliers to capture at least some of this traditionally outbound demand.

“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,” concluded Stephen Collins.

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

More Information

See the full report here.

Leave a Reply

Your email address will not be published. Required fields are marked *