COUNTRYWIDE HOTELS: MARKET PERFORMANCE
Countrywide Hotels: Market Performance
One of our many challenges is with the delay in the return of the groups market, which historically supported shoulder periods in our corporate or location led assets. This market we anticipate to restart booking once a vaccine has proved some form of reliance, giving groups the confidence to travel in larger parties.
The positive as mentioned in the latest 'Christie & Co report on UK Hotel Market Covid-19 Impact & Recovery' echoes what we have witnessed in our own business, with self-contained lodges, golf, health clubs and UK leisure destinations seeing very strong performance outside of lockdown. From August to the start of November, UK leisure replaced other market segments at stronger average room rates and on spend whilst at the property, customers demonstrated great restraint and understanding with properties that put wellness at the forefront of the procedure.
Smaller meetings and training demand for conference space has increased over the last month. We anticipate larger conferences to be slow-in return, as a result of social distance requirements for corporates, the costs associated with businesses and continued Government restrictions.
Christmas this year will reflect the local lockdown safety measures, resulting in restaurant performance whilst Christmas parties skip a year. Multi-night accommodation stays over Christmas are picking up, again due to the relaxation on COVID measures.
Many wedding venues will benefit from the double impact of two years’ worth of weddings, pushing demand into mid-week events for 2021; creating a larger income stream for those venues which historically did not perform in this market.
Lastly, Hotel Investors have benefitted from the VAT allowance, business rates and the furlough scheme to drive conversion to the bottom line. This has created a short term bubble for over-leveraged assets, in the mid-term providing new inventory to the market for next investor who has sights on a ‘low value to pre-covid price’, offering good returns in a 3 to 4-year exit.