Although Visit Britain has estimated Covid-19 will cost the tourism industry approximately £15 billion in 2020 and result in 22 million fewer visitors to the UK, it's not all bad news. The longer term outlook for UK domestic tourism is strong as overseas travel remains less appealing and in some cases impossible.

In the current challenging market, holiday accommodation providers are already trying to capture future bookings through offering heavily discounted vouchers that can be purchased now and redeemed in up to 18 months' time. We are also seeing a rise in 'no penalty for booking changes' offers.

These initiatives will be partly in response to concerns by owners that they may lose their Furnished Holiday Letting (FHL) status, which provides some tax advantages. The criteria for FHL status includes a requirement to let for at least 105 days per year and this will prove difficult or impossible in the current lockdown conditions.

Thankfully, HMRC permits holiday property owners to ‘make a period of grace election’ whereby FHL status can be retained if you can show that you genuinely intended to meet the letting condition in a given year, but were unable to do so due to unforeseen circumstances, such as Covid-19.

However, when restrictions are lifted, people will want to get out and about again and we firmly believe that the self-catering holiday accommodation market will thrive in a ‘new normal’ market.

While domestic consumers may shy away from large hotels and resorts, it is likely that they will be drawn instead to rural and secluded holiday accommodation where guests can hunker down and feel safe.

Owners of holiday cottages and glamping on rural estates should consider capitalising on the potential growing market demand and perhaps think about converting estate properties from long-term lets to shorter-term holiday accommodation.

Average annual occupancy rates in England of 60 per cent and 55 per cent in Scotland may well increase across the board during the short to medium term and to a far greater extent in prime tourism areas.

For owners of holiday accommodation and those thinking of offering it for the first time, high standards and a broad range of facilities and added value services will be even more important than usual in terms of achieving high occupancy rates.

Furthermore, rigorous hygiene measures will be essential and where these were taken for granted before, it is likely that these measures will need to be emphasised and heavily promoted in the future.

The Instagram effect can’t be underestimated in terms of attracting customers and maintaining occupancy rates. Run-of-the-mill properties have their place, but it’s about exciting the customer and making them want to book. A unique property that also offers added value, with extras such as a hot tub and outdoor pizza oven, will help your property stand out as well as enabling premium prices to be charged.

Further information

Read more: HMRC Guidance: Furnished Holiday Lettings (2020)