Ghoulish it may be, but there are an awful lot of people - OK, let’s be kinder and say groups - who are yearning for distress in the hotel market. Really itching to see entrails on the pavement, brains on the floor, wailing and renting of clothes. Absolute and total suffering. We hear a lot about The Wall of money looming over the sector - much like Donald Trump’s wall with Mexico, the sector is expected to pay for it, in blood.
But will they be disappointed in their hunt? Lambis Pahiyiannakis, acquisition manager, Sani & Ikos Group, told this week’s In Focus that, with government and bank support, a lot of hotels which would have fallen by the wayside in Greece will live to fight another day. Will this stay of execution be temporary? Without going back to the scythe carrying, the hope was yes, if only so that hotels which had been coasting along on low supply and high demand could be replaced with something of higher quality. But, if travel comes back without any second-wave hiccups, locations such as Greece could well trot on as before, with the exception of family-owned hotels where the horror of being forced to closed was such that the pain of owning in the sector forced a sale.
What have we learned from the virus so far? The same virus has a different impact on health depending on government response and the same virus will have a different impact on the hotel sector in each country as a result.
This goes a long way to explaining why much of The Wall of money is blocking the light in the UK, where the country’s government has decided that bringing in a quarantine really is the thing to do. As the people at Eurostar will tell you, seats on the trains for 7th June sold out rapidly following Home Secretary Priti Patel’s announcement, as travellers picked a side. With the EU looking to 15 June to open borders, those with a taste for cheap red wine were picking East.
This is unlikely to end well for the UK. UKHospitality CEO Kate Nicholls said: “The basis of any quarantine conditions must be science-led and backed with a clear set of criteria for the length of their imposition. The imposition of a quarantine period will inevitably damage international visitor travel, and the longer it is in place, the more damage it will wreak.”
Despite a lengthy debate in the House of Commons this week, the government neither gave way nor committed to how it was going to support the travel sector once the barriers went up. Meanwhile, The Wall of money crowds closer, the same wall which started to sniff bargains after Brexit. Then, distress was staved off by a falling pound, which drew in overseas visitors. Finding the salvation now is harder, particularly wth many staycation locations trying to deter visitors.
The Wall’s hope is for distress in the UK, but with long-term hope, as illustrated by the inaugural quarterly Hospitality Investor Sentiment Assessment, conducted by Questex and ABP Invest. London remained a target for investors, who clearly viewed any distress as a temporary state.
Away from the UK and government support for the sector is varied, but there are at least attempts to get travel moving again and this hack can report contacts who have stayed in hotels and aren’t key workers. Issues remain for owners - occupancies are restricted in Germany and elsewhere in the EU. Listed companies remain vulnerable to the nerves of stockbrokers. But The Wall may not get all that it wants.