STR has reported an increase in hotel planning applications across the UK, led by economy hotels, including two Travelodges.
Thomas Emanuel, director, Europe, STR, said that, looking at current performance, “The higher the class of hotel the lower the occupancy”.
He added: “We noted an increase in the number of planning applications across the UK. The majority of applications are in the economy sector, which is no surprise looking at recovery patterns in China and the US, which have been strongest in that sector. We have also seen increases in planning approvals, all over the UK.”
Reporting on the week of 15th to 21st June, Emanuel said: “Weekday peaks and weekend troughs are normal, with ADR seeing year-on-year declines of 47% and revpar falls of between 82% and 90%, which still remain truly staggering data points.
“Looking across the UK, there is a lot of variance, from 6% occupancy in Belfast to what seems like an eye watering 52% in Aberdeen, but most cities remain in the 20% to 30% bracket. There is a weekday premium when looking at the upscale, upper midscale, midscale and economy classes, but not at the higher end of the market. The higher the class of hotel the lower the occupancy, with luxury hotel occupancy sitting at 5% since the beginning of April.”
Assessing consumer sentiment, Emanuel said: “March 11th, when the WHO declared Covid-19 a pandemic, marked a significant change in consumer sentiment. It is telling to compare propensity to travel before and after for English-speaking travellers - all groups noted a decline, but what is more insightful is to look across the age groups. The higher reduction in propensity to travel was recorded in younger travellers. The economic uncertainties linked to Covid-19 have disproportionally affected younger travellers, while those older travellers who were more susceptible to the virus, showed less of an impact.
“Amongst UK travellers, they had fewer travel intentions compared to those from the US, Australia and Canada. There is a sense that all UK consumers were equally impacted by initial negative consequences as the net reduction in propensity to travel was broadly the same.
“Finally, the industry has a date to open - on what has been dubbed ‘Super Saturday’ on 4 July. It will be fascinating to see the changes in demand trends.”
The UK government has now released its guidance for hotels to open, including:
Taking measures to make reception areas safer, with increased cleaning, keeping the activity time as short as possible and considering the addition of screens between guests and staff.
Considering minimising lift usage from reception, and providing clear signage for new lift rules
Where offering room service, taking measures such as dropping butler’s trays outside door, and encouraging tips to be added to the bill
Ensuring that housekeeping staff follow government handwashing guidelines, and making a checklist of all hand contact services to be cleaned when each guests vacates.
Encouraging guests to wear masks on communal corridors
Checking the latest government guidance on opening of additional guest facilities (e.g. swimming pools, saunas).
Ensuring that any bar or dining area is only opened in a way compliant with UK government guidance on the hospitality sector.
Insight: You cannot keep Travelodge down, it appears, although it bears pointing out that these planning applications will have been made before the latest round of Travelodge-is-the-canary-in-the-downturn-coalmine. Should one of the other operators alluded to by Secure Income Reit step in, they will no doubt also feature heavily in future planning, providing an even greater lure to flash ankles at owners.
Because economy is where it’s at, for a number of reasons. Leisure travellers are feeling poor - or anticipate feeling poor in the future and the same for business travellers, of which there are some, let your eyes not deceive you. They’re cheaper to run. And faster to get out of the ground.
Fear of imminent poverty is true in particular in the UK, which is forecast to be one of the hardest hit of the developed nations. Anyone who has been in the centre of London of late and contrasted it to capitals on the EU can confirm a certain quietness, aided by an uneven lifting of lockdown, but it is Brexit which is expected to give the UK its real edge. So expect more melamine and less gold and marble.