UK: Colliers International’s COVID-19 Recovery Hotels Index has revealed the top city performers of the UK regarding market bounce back following the ease of lockdown restrictions.
The COVID-19 Recovery Index, created in tandem with Colliers’ fourth annual edition of its UK hotels Market Index, has identified five core indicators for analysis:
- Domestic visitors as a percentage of total travel
- Leisure visits as a percentage of total domestic travel
- Budget and serviced apartment rooms as a percentage of total hotel supply
- Branded rooms as a percentage of total hotel supply
- Reliance on meetings, incentives, conferences and events (MICE) sector
Each criteria is individually scored on a scale of one to five, with one being the lowest and five the highest.
Plymouth is positioned as the top city in the ranking of 35 markets nationwide. The area’s predicted success is due to the fact it benefits from predominantly domestic tourism (86 per cent), as well as a significant portion of these travellers visiting for leisure purposes.
The area’s hotel stock is largely concentrated at the lower end of the market, with budget brands such as Premier Inn and Travelodge forming large portions of the market.
Plymouth also has a modest reliance on the MICE sector, which is likely to experience a slower recovery period.
Other top performers include:
- The Isle of Wight – in second place, 90 per cent of its visitors are travelling from domestic markets for leisure purposes.
- Exeter – in third place due to its large domestic travel base, as well as its pull as a popular leisure destination.
The firm notes that although not included as part of its analysis, it would expect other coastal resort towns in the UK to also experience a similar recovery pattern.
Mark Finney, head of hotels and resort consulting at Colliers International, said: “Given that our recovery index punishes a low domestic and leisure tourism base, a high percentage of non-branded hotels, a lower share of budget and extended stay room stock and a strong reliance on the MICE sector, some of the best hotels markets, such as London, Edinburgh and Bath, will rank lower than expected in our recovery ranking. It will take these very strong markets longer to recover back to where they were.
“Of course this is a general market recovery index and site/property specific factors will lead to significant variances. This is particularly relevant for individual budget/midscale hotels and serviced apartments, which we expect to cope better with the COVID-19 crisis. Similarly, we envisage hotels with a higher reliance on rooms revenue to outperform full-service products. This is due to social distancing protocols which will inevitably limit the use of public areas and ancillary facilities in the short-term, including restaurants, bars, meetings spaces and spa amenities.
He continued: “Fundamentally, we anticipate that domestic leisure locations will recover at a quicker pace, given their smaller reliance on certain sources of business which have been badly affected by COVID-19 such as the number of overseas visitors and larger MICE events. So good news in the short-term for traditional British seaside resorts such as Blackpool and Bournemouth, national park locations and Devon and Cornwall. This said some of these markets within the top 10 have traditionally been very small – so even though they appear top of the list, the uptick will be small in absolute terms.
“Conversely, the bottom 10 locations are heavily reliant on overseas visitors and MICE business. No surprise that restrictions on air travel, quarantine measures and gatherings of large groups could affect these markets well into 2021. For hotel investors who have deeper pockets and the patience to wait for the market to return, clearly cities such as London, Oxford and Edinburgh remain of great interest to investors.”