UK: Based on the latest analysis of major European hotel markets by CBRE, Edinburgh, Glasgow and Manchester are well positioned for recovery once travel activity resumes.
The report identifies those markets with material exposure to leisure demand and a low reliance on international travel (particularly long-haul) and MICE demand are best positioned for a more rapid recovery.
Domestic travel will be the first to rebound, supported by the gradual reopening of economic markets alongside the lifting of some travel restrictions.
Germany, the UK and Italy usually have the highest share of domestic tourism spend which is said to give these countries an advantage, notwithstanding of the economic effect of COVID-19 and consumer perception of risk.
International travel demand will take longer to return, with short-haul recovering before long-haul. Findings suggest that accommodation providers in gateway cities and airport locations will be most exposed to the limited volume of international travel demand.
Generally, the growth rate of corporate demand has been lower than the growth rate of leisure demand over the last decade. Leisure travel is likely to see an immediate surge, with countryside and rural hotels across Europe expected to benefit from this trend first.
CBRE expects corporate travel to return as economic activity resumes, although this will be limited and will remain below ‘normal’ levels for the short-to-medium term.
International MICE is likely to be the most impacted segment and will take the longest to recover within hospitality. Cities such as Paris, Vienna, Madrid, Barcelona and Berlin are heavily exposed to large meetings and events and have witnessed many postponed or cancelled.
In the long term, these European cities are well positioned to capitalise on the recovery given their availability of leading conference and exhibition space, infrastructure and connectivity.
Joe Stather, associate director for hotels at CBRE, said: “Previous demand shocks in the hotel market show us that not all customer segments are impacted to the same degree, or indeed follow the same trajectory in terms of recovery. We anticipate that markets across Europe which have previously benefitted from strong domestic leisure demand are well positioned to lead the recovery cycle.”