The UK is leading the hospitality recovery in Europe with a rebound faster than in China or the US, according to hospitality data analyst STR.
Robin Rossmann, STR managing director, described the hospitality performance across Europe in May as “bleak” with the UK “the only exception” following an easing of restrictions on the sector from May 17.
Rossmann said: “In the space of two to three weeks seven-day occupancy for open hotels reached 60%-65% [in the UK].”
The only other European market to perform near to that level was Portugal with occupancy just above 40% at the start of June.
Rossmann reported: “Europe is still bumping along the bottom. We’re just at the beginning of things recovering in Europe.”
Occupancy in the week to June 6 across all UK hotels, including those not yet open, was 55%.
Rossmann said: “That is unbelievably good. It’s remarkable just how quickly UK occupancy has recovered and how impressive that is compared to the US and China which have taken much longer to recover.”
UK occupancy remained 30% down on 2019 levels in early June, but average daily room rates recovered to just 20% down on 2019 suggesting the recovery “was not at the expense of room rates”, he said.
By contrast, Rossmann reported: “Most of Europe is struggling at 10% to 20% occupancy, [although] the Spanish Islands are doing a little better.
“The UK is far ahead for business on the books through the whole of June. We see no pick up yet in Europe, except in Spain which starts to pick up in July. The Canary Islands and Balearics have good business on the books for July and August. The rest of Europe only picks up from August.”
However, he suggested: “There is significant room for this to change in the next two to three weeks. Demand came through last summer when we were in a much worse position.”
Rossmann forecast UK occupancy would stabilise around 50% “for a while” and said there was nothing in the forward data to suggest a pick-up in international bookings.
He reported UK regional markets doing “much better” than London, with overall occupancy 25 percentage points ahead of the capital, and he forecast the regions would continue to outperform through to the end of August underpinned by weekend leisure demand.
But he pointed out: “Not all cities are going to suffer. It depends on the levels of local and domestic demand. Edinburgh has much higher occupancy than London at up to 75%.”
Rossmann added: “Room rates are recovering faster than we expected. In the upscale sector there is a recovery to 90% of pre-pandemic levels.”
The recovery at the upper end of the market is born out by average daily rates in China and Dubai, he said, with “all classes of hotel in China pretty much back at 2019 levels” and rates at luxury hotels in Dubai “trending well above 2019”.
STR’s long-term forecast of a global recovery to 2019 levels within four years remains unchanged. But Rossmann suggested: “By the fourth quarter of 2022 we forecast we will be at 90%, so it will feel pretty normal.”