top of page
Search
katherinedoggrell

Headwinds create uncertain outlook for hoteliers


Despite rapid growth and a stronger than expected rebound in demand in 2022, recovery in the UK hotel market is set to stall in 2023 in the face of continued volatility of trading conditions and rising operational costs.


But, as the PwC UK Hotels Forecast 2022-2023 reveals, there are diverging fortunes for hotels in London and those in the UK regions.

Revenue per available room (RevPAR) in London in real terms is forecast to reach between 101% and 105% of pre-pandemic levels by the end of 2023.

However, in the regions, where GDP - which is forecast to fall close to zero in 2023 - is a stronger driver of UK domestic corporate and leisure demand, RevPAR is more uncertain, reaching between 85% and 98% of pre-pandemic levels by the end of 2023 in real terms. “With a laser focus on cost optimisation and the right investment strategies, I believe hotels across the UK can weather this latest disruption, emerging stronger and more resilient for the future, " said Samantha Ward, UK Hotels Leader. Inflation, energy costs and rising interest rates remain major factors impairing the industry’s recovery, in addition to staffing shortages and supply chain disruption. Consumer confidence also continues to be hit by the cost of living crisis but current forecasts predict inflation to fall back to 3.6% by the end of 2023, which could start to ease some of that pressure.

Hotels Forecast 2023 in numbers

Even though many hoteliers went back to zero-based budgeting during COVID-19, this is now being revisited due to the impact of inflation. Hotels have been able to absorb increased costs to date through higher room rates but they must now find new efficiencies beyond energy across areas such as payroll and the supply chain.

Cash remains king and it is more important than ever to address fundamental priorities during a downturn, taking a hands on approach to cash management and managing the cost base, as well as thinking about balance sheet restructuring and negotiations with lenders to amend covenants or debt facilities.

Comentarios


bottom of page