Occupancy levels recover faster than expected in H1
The transactional market remained active mostly during Q1 of 2022, but the war in Ukraine and growing economic uncertainty reportedly started to impact transactional volume during Q2
Occupancy levels across have recovered at a much quicker rate than anticipated in the first half of 2022, nearing 2019 levels in most markets since May 2022, according to Christie and Co, which has launched its ‘Hotels: 2022 Mid-Year Review’.
Additionally, it found that operators have focused on maintaining high ADRs to absorb some of the increasing cost pressures. This is said to have positively impacted RevPAR in both city-centre and regional UK hotel markets, making the summer season look positive.
However, the review also notes that hoteliers have been faced with a challenging trading environment so far in 2022, with headwinds such as inflation, staff shortages and wage increases, supply chain disruptions, spiralling energy costs and the cost-of-living crisis all having intensified significantly over the last six months.
The transactional market remained active mostly during Q1 of 2022, but the war in Ukraine and growing economic uncertainty reportedly started to impact transactional volume during Q2, meaning the total volume transacted in H1 2022 is “slightly behind” the same period in 2021.
It is reported that Christie and Co is currently instructed on over £1bn worth of hotel assets across the UK and has sold almost 50 hotel businesses in the UK in H1 2022, which is said to demonstrate the continued buoyancy of the market.
Looking ahead for the rest of the year, the report suggests 2022 might end up being a story of two halves as consumer sentiment remained generally positive until spring, and the sector has been recovering more rapidly than first thought, so operators are “anticipating a good summer season”, albeit below the record highs of 2021.
Carine Bonnejean, managing director of hotels, said: “Whilst we are now firmly past the covid crisis, the hotel industry and the wider real estate market are likely to experience further turbulent times in the months to come.
“The pace of the recovery was completely unexpected with performance ahead of 2019 already, a far cry from the 2 to 3 years originally anticipated; however, we may be entering another phase of the cycle by the end of 2022.”
