Research by hotel booking platform, hoo, has revealed how the UK hotel sector has been decimated by the pandemic with revenues plummeting 73%, despite the boost brought about by two summers of staycations. hoo analysed data on hotel market size based on total revenues which shows that since the outbreak of Covid in 2020, the total revenue of the UK hotel industry has plummeted to just £6.2bn in 2021, having sat comfortably above £20bn a year throughout the previous five years.
This decline in revenue levels means the average annual rate of growth since the start of the pandemic sits at -36% a year, with the sector having enjoyed a 5% annual growth rate between 2016 and 2019. The research is supported by data from Hallidays that shows the estimated value of the market fell even further in 2021/22 to £5.8m, down from £20.6m in 2020/21
hoo also analysed hotel revenue levels across seven other nations including the US, Australia, France, Spain and Italy. The data shows that all seven territories saw a notable decline in revenue in 2020 as the spread of Covid arrived earlier than in the UK – with the largest annual decline seen in Spain with a drop of -58.8%.
However, 2021 has seen revenue levels bounce back across all of these countries bar Australia which has remained under strict lockdown regulations, preventing the vast majority of inbound travel.
The United States has seen the largest uplift with hotel revenues climbing 43% in 2021, although they remain far below pre-pandemic levels despite this positive movement. When analysing the average annual change to hotel revenues, just Spain enjoyed a stronger performance than the UK prior to the pandemic (2016-19) increasing at a rate of 6% per year.
Since the outbreak of Covid, the -36% annual decline in revenues seen across the UK is the largest of all nations analysed, with just Australia coming close with a -35% decline year on year. hoo Co-founder, Adrian Murdock, commented: “Despite a second summer of staycations that saw domestic holidaymakers flock to UK tourism hotspots, a lack of foreign travel has severely impacted the hotel industry with revenue levels barely tipping a quarter of what was taken prior to the pandemic. It goes to show just how vital foreign tourism is to the UK’s economy and just how badly the sector has suffered of late. To make matters worse, the industry will now be understandably fearful that the spread of the Omicron variant could slow any expected growth for in 2022.”
Hotel businesses will be digging in again, having fought tooth and nail to survive for this long and the hope will be that any impact will be short-lived and confined to the quieter winter months.