STR webinar on COVID-19 impact on European hotel performance
An hour-long webinar that is easy to follow. The main presentation commences around 5 minutes into the recording with the Q&A section beginning at the 49–minute mark.
At its core the webinar suggests that for many areas of Europe August was better than expected, but that a distinct decline in occupancy was apparent from the start of September, a function of both the end of summer and the beginning of what many fear is a second wave of the pandemic.
While many hotels did reopen in August, it is noted that in Spain more than 30% remained closed. Of those hotels that were open occupancy averaged around 40%, however there was considerable variation, with areas such as SW England seeing occupancy well in excess of 70% whereas major ‘gateway’ cities in Europe lagged behind with occupancy between 20% and 30%.
It is noted that while many hotels have business on the books for the next 14 days, beyond that levels are markedly down on where they would typically be. The suggestion is that regional leisure–oriented hotels are likely to see occupancy recede from the summer ‘peak’, city destinations may continue to see tentative signs of recovery.
The corporate market is likely to remain weak in the near term, but it is noted that in many European countries close to two-thirds of workers have returned to the office, whereas in the UK it is only around one-third.
Revenue per Available Room in 2021 is forecast to remain well below levels seen in 2019, but even this prognosis is based on the potentially heroic assumption that a vaccine is in widespread use by early 2021.
Based on historic precedent it is suggested that the economic recession brought about by coronavirus lockdowns will impact the hotel market negatively for at least three to four years, with business and group leisure travel the sectors expected to see the slowest recovery.