Hoteliers remain positive about the UK and Ireland hotel market, with hotels outside London expected to recover to pre-Covid levels of financial performance by 2023, according to the latest Hotel Operator Survey conducted by Cushman and Wakefield.
The real estate services firm found that due to continuing challenges and uncertainties around international travel, London is expected to have a “potentially slower” recovery, not reaching pre-Covid levels of financial performance until 2024.
However, it said that all of the UK’s top hotel markets are now seen as more attractive than they were 12 months ago, following a better than anticipated economic recovery.
In terms of ranking of interest from hotel operators, the survey found that London continues to top the list, attracting international interest despite extensive supply.
Markets in Dublin and Edinburgh also remain in high demand, at second and third place respectively.
Meanwhile, the strong regional markets of Oxford, Cambridge, Bristol and Brighton were “significantly more attractive” to operators compared with a year ago, led by “incredibly strong” business since the re-opening of hotels in July in light of rising staycations.
According to the survey, hoteliers believe that gross operating profit (GOP) will recover across all markets by 2025, faster than many have predicted.
Despite the ongoing impacts of the pandemic, rising labour costs and shortages, respondents said that more efficient business models and a better use of technology could help negate these challenges.
Cushman and Wakefield added that the general consensus was that revenue per available room (RevPar) will recover to pre-pandemic levels by 2023-2024, with almost all respondents agreeing on full recovery across the whole of the UK by 2025 at the latest.
Major regional cities were expected to have the shortest RevPar recovery, with cities such as Glasgow, Edinburgh and Manchester expected to recover by 2023. London is expected to fully recover slightly later in 2024.
Richard Candey, head of Investor and Developer Services for Cushman and Wakefield’s EMEA Hospitality team, said: “While the interest in UK markets among hotel operators remains strong, there is increasing polarisation of the commercial terms these operators are willing to offer and where they are willing to go the extra mile.
“In order to find the right operating partner for the owner, it is ever more critical to have in-depth understanding of each operator’s preferences and latest shifts in their expansion strategies, which is the objective of this survey and part of our daily work.’’