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PwC Releases UK Hotels Forecast 2019-2020
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The hotel industry is at a pivotal point.

Global and UK political and economic uncertainty, high industry cost inflation, and increasing difficulties in recruiting and retaining staff means that hoteliers need to adopt tech-enabled solutions, increasing efficiency, reducing processes, managing data and enhancing the customer journey.

Our UK Hotels Forecast at a glance

Looking ahead to 2020, we remain cautious in our outlook for UK hotels, although industry performance will vary widely by geography, segment and business model.

London hotels performance

In London, we forecast some modest growth next year, buoyed by international tourism. Despite our fears in our update in March 2019, we now expect London will hold onto growth for the rest of the year, quite a feat given a relentless supply of new rooms.

Big sporting events were a positive contributor to London performance. The ICC Cricket World Cup helped uplift occupancy and hoteliers tell us they enjoyed a better than ‘normal’ Wimbledon. Continuing the sports theme, Major League Baseball also came to the London Stadium in June.

Maintaining the growth will get harder in 2020. While we think occupancy rates will slip into negative territory, we still forecast 1% growth in RevPAR. But inflation increases could put London’s forecast of modest ADR gains under strain.

Outside of London

While 2019’s trading performance looks better than we thought in March 2019, conditions are changing and overall it has been a difficult year. We forecast weaker business and leisure confidence and continued high new supply additions. Our forecast for 2020 is a -0.6% decline in occupancy growth, a slight gain in ADR but a drop in RevPAR of -0.3%.

While one-off Cricket World Cup-related demand probably helped slow regional declines in the summer, it wasn’t enough to balance an overall decline in the business market and stop a fall in RevPAR for the second consecutive quarter of 2019.

In the regions, we forecast small declines in RevPAR growth in 2019/20. Looking ahead, UEFA Euro 2020 should help Glasgow (and London) hotels and a new Government Tourism Deal is intended to help businesses attract more visitors by becoming more digitalised and ultimately, more profitable.

Download the report here.

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