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Slow recovery forecast

Staycation hope as city hotels slash prices

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Edinburgh’s hotels remain the UK third most expensive

The cost of an overnight stay in Edinburgh has fallen by a third as the pandemic forced hotels to slash prices.

Cancellation of the festivals contributed to a 63% decline in revenue per available room (RevPAR), the sharpest fall of any of the 24 UK cities measured in PwC’s UK Hotels Forecast 2020-2021. Occupancy halved to 40.3% from 79.8% the previous year.

Despite the fall the city remained the third most expensive in the UK behind London and Brighton.

In Glasgow, RevPAR fell by 54.2% as occupancy dropped to 24.25%, while Aberdeen saw RevPAR decline by just 1%, though occupancy fell to 44.1% from 65.5% the previous year.

PwC says the three cities should begin to recover in 2021 due to increased demand for ‘staycations’ across the UK, outside of London.

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In the bleakest outlook since benchmarking began in the 1970s, hotel occupancy rates in 2021 are forecast to be 55% across the UK, increasing from 42.2% in the year to July 2020. The study reports that it could take four years to return to pre-pandemic levels.

A slow recovery in corporate international travel and weak demand for business trips, meetings and events means the forecast is particularly bleak for London.

Overall revenue per available room is forecasted to fall significantly in 2020 to £28.72, £100 less than in 2019. 

With a vaccine, it is expected to recover to £64.81 in 2021 but in the long-term it’s unlikely that occupancy, ADR (average daily rate) and RevPAR (revenue per available room) will return to 2019 levels until at least 2023.

Claire Reid, regional market leader for PwC in Scotland, commented: “Our cities still have plenty to offer and will appeal to those looking for a ‘staycation’ in 2021 and that will give hotel operators some hope. 

“We’ve seen how quickly hotels adapted to our new way of living when they reopened in the summer, and there is a fresh impetus now for digital transformation.

“A number of hotels have been deploying more contactless technology, digital check-in, and digital room keys, as well as in-room voice devices and digital concierges.

“This allows fewer touchpoints with workers, but also automates systems and frees up staff time to improve guest experiences.”

Perth hotel at risk

One of Perth’s biggest hotels is facing permanent closure with its entire workforce made redundant.

The Best Western Queens Hotel in Leonard Street closed immediately after national lockdown measures were announced in March.

Staff put on furlough following the closure had been hoping to return to their roles before the year was out but the Perth company now managing the 51-bedroom hotel has claimed the business is no longer viable and it has no option but to lay them off.

An email sent to employees, said: “COVID-19 is continuing to have a detrimental impact on the hotel, and the increased government restrictions and measures, along with the second wave of coronavirus, has meant that it is not viable for the hotel to reopen.

Uncertain future: Queen’s Hotel

“The business is therefore proposing for a full permanent closure. This means that unfortunately, the business has no other option but to propose redundancies following a full closure of the hotel.

Richard Ellison, managing director of owner 7 Hospitality, told the Perthshire Advertiser: “Unfortunately the extremely tough decision to move to a redundancy consultation process has been taken at the Queens Hotel, Perth, the outcome of which remains outstanding.

“The combination of the government enforced closure in March, the continued impact on hospitality due to COVID-19 and entering into the quieter winter season means that at this stage, the business is not feasible to continue in the short term.”

Mull hotel investment

Isle of Mull Hotel & Spa, owned by Crerar Hotels, is to undergo a £3 million redevelopment into a four-star 72-bed establishment with the aim of re-opening next April.

It will create 20 full-time jobs and brings Crerar’s total recent investment in its portfolio to more than £11million.



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