Last week saw the UK’s vaccine minister Nadhim Zahawki comment that it was too soon for the public to book holidays, adding: “It’s far too early for us to even speculate about the summer”.
This is a great shame for the travelling public who had, as a mass, started speculating in quite a frenzy about the summer, as the rain and the snow and the restrictions fell around them.
It was also a great shame for the travel sector. EasyJet CEO Johan Lundgren wrote to ministers with a ‘loose lips sink ships’ message, adding: “It would be much better to tell people they must check their airlines'’cancellation policies. Not tell them not to book at all.”
Ministers instead turned the public’s eye west, with health secretary Matt Hancock commenting: On the summer holidays, I’m going to Cornwall and I’ve said before I think we’re going to have a great British summer”. Cornwall is unlikely to be able to accommodate everyone in the UK - although less those who wouldn’t find it relaxing to bump into Hancock over a cream tea - during the summer, although no doubt there are many enterprising individuals setting up yurts to try and change this as we speak.
Matt Brayley, marketing director at holidaycottages.co.uk, said: “So many of us rediscovered the joys of a staycation last summer and early autumn, which has resulted in a lot of people rebooking for 2021. This, coupled with reservations carried over from our customers who chose to defer their holiday from 2020 to this year, means significantly more properties are already booked from Easter onwards.
“Whilst the normal rush to book since Boxing Day has been quieter this year, with people naturally cautious due to the evolving situation and restrictions, since Saturday we’ve seen an 85% increase in bookings compared to last week as people begin to think about a staycation.”
Felicity Jones, global real estate sector head & partner in the corporate & M&A group, Watson, Farley & Williams, told a webinar this week that the brands needed to refocus their marketing heft on the domestic market this year, given that their hotels would be unlikely to be attracting much in the way of overseas business and this was borne out this week by PPHE’s results, looking back at the relentless this way/that way of last summer.
The company reported that domestic business in July and August last year accounted for almost 90% of group room revenue in the UK and 76% in Germany, and in the Netherlands 84% of room revenue was either domestic or from bordering countries.
PPHE said that, as lockdowns and travel restrictions were gradually eased, it anticipated that strong domestic demand would return in the first instance, followed by international leisure and business travel.
Boris Ivesha, president & CEO, PPHE said: "Whilst the near-term trading environment remains challenging, mired by further government-imposed lockdowns to stem the spread of the virus, we are encouraged that vaccine programmes are being rolled out in all the markets in which we operate. As restrictions are eased, we anticipate a phased recovery driven by strong consumer demand for leisure travel, which we experienced in the summer of 2020.”
The group has its cash position lined up, with £197.6m cash available as at 31 December 2020. The good news for PPHE is that, as an owner/operator, it has less in the way of masters to serve and has continued to develop, with the construction of art'otel london Hoxton continuing, after the group secured a £180m loan in April. With the distress likely to come into the London market sooner rather than later, as the UK government continues to ignore the sector, it could also see an opportunity to acquire development sites at an advantageous price.
IHG’s study of the summer staycation told a similar tale, with Karan Khanna, managing director, UK & Ireland, IHG Hotels & Resorts commenting: "We've seen that people's appetite to travel and explore hasn't changed, but understandably their confidence in when it's safe to do so has. Cleanliness and flexibility are top of mind for everyone now.
"There's been a reawakening in appreciating small-town life, our families, quiet communities, reconnecting with nature and unplugging from technology. There's an argument to be made that when travel resumes to pre-pandemic levels, it will be done with a greater sense of purpose and appreciation for local communities and the environment."
The company reported that booking windows had shortened significantly, with 69% of bookings happening within seven days of stay, compared to 46% during the same period last year. So that pent-up leisure demand may be frothing up at the moment with the OTAs, but whereas last-minute booking used to be the preserve of the bargain hunter, it is now the learning of the pandemic traveller.
When we get out of All This will people extend their windows or will this be yet another accelerated trend? Something to keep the revenue manager in your life awake at night.