UK Hotels: What We Expect for The Sector In 2022

By Grant Thornton

The long-term outlook for the UK hotel sector remains positive. At the Annual Hotel Conference in Manchester at the end of November, one panellist described being ‘cautiously optimistic’ about the situation. However, operators should still prepare for many challenges in the near term. Oliver Haunch looks at the current state of the market and why they expect to see a rise in new lending and corporate restructuring in this sector.

There’s a wide disparity in performance and recovery in the hotel market across the UK. Demand for rural and leisure focused assets was strong over the summer due to continued international travel restrictions. Hotels in popular UK holiday destinations such as Cornwall or the Lake District enjoyed a significant rise in ADR and RevPAR, with occupancies reaching close to 100% in certain locations.

In contrast, many city centre and airport hotels, or assets with an event or corporate-focused offering, are still operating below pre-COVID-19 levels. For many of these hotels, the return of international travel will be key to their recovery. While the US recently reopening its doors to international visitors is a hugely positive milestone for transatlantic travel, according to data released by Tourism Economics in July 2021, international journeys are not predicted to return to pre-pandemic levels until 2024.

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