With the mass rollout of vaccinations underway, the end of the pandemic is on the horizon. As a result, it’s more likely that the UK will enjoy a relatively uninterrupted summer once the lockdown measures have been eased.
Last year the regional UK hotels market experienced a boom following the easing of restrictions, with people keen to get out of their homes and enjoy what the UK has to offer.
The result was some of the best operational performance for a number of hotels in UK coastal and country staycation locations, with occupancy levels in excess of 90 per cent through August and September 2020.
During these months many UK hotel operators also experienced considerable year-on-year earnings before interest, taxes, depreciation, and amortization (EBITDA) growth as government support (VAT, Business Rates and furlough) reduced operating costs considerably.
The same level of support is unlikely to remain during summer 2021 despite mounting pressure from the industry, however operating costs have been re-based and owners should expect a good season ahead.
From an economic point of view, this year we can reasonably expect domestic spend to increase as many households have increased savings over the last year, coupled with a low inflationary environment. We expect overnight tourism spend to almost double this year compared with last year.