The road ahead for hotels

On 8 July, less than a week after the lockdown began to ease in England, our Board Director and Head of Land, Nicholas Mee, joined an expert panel to discuss the possible direction of travel for recovery of the hotel and hospitality sector in the UK.

Convened by BNP Paribas, Nick was joined by Mark Anderson (Managing Director, Property and International, Whitbread) and Shane Casserly (Head of Strategy and Development, Dalata Hotel Group) to discuss what the future might hold, with a clear consensus emerging that we can and should be upbeat about the sector.

As with many industries, the lockdown period has proven itself a challenging time for hotel operators, with the majority being closed for at least three months without any income. This has put pressure on almost all companies; not least given the fixed operating costs incurred such as rent, taxation and staffing. However, despite this, there are clear and credible reasons to be optimistic about the future.

As a sign of things to come, Whitbread opened its Premier Inn brand in Germany in mid-May and has seen consistent growth in demand. Thus far, this has been driven almost exclusively by an enthusiastic return to domestic leisure travel, booked immediately in advance: a trend which has also proven the case for Dalata Group, who have now been trading for two weeks in the Republic of Ireland. The reason, as might be expected, is that many people are eager for a summer holiday whilst businesses are yet to return to corporate travel and large events have been cancelled in the short-term.

However, optimism is in the air. September is a historically strong month for hotel bookings, particularly amongst corporates. This aligns with when many businesses are expected to consider returning to more traditional ways of working and business travel is anticipated to pick up. Likewise, whilst there’s a mountain to climb in 2021, the long-term fundamentals remain good for many operators, supporting the viability of good brands. Then there is the timeframe of the pandemic to consider. “All of our developments are substantial in scale and are long-term investments”, said Mee, “and we believe there will always be strong demand in the long-term”. He went on to make clear that, from a Rockwell perspective, “it’s a case of when the sector will recover and not if it will”; a point which was met with agreement across the board.

Not only do Rockwell remain eager to deliver, but operators are keen to acquire and to manage new sites. Whitbread have a pipeline of 4,000 new rooms over the next two years, whilst Dalata remain eagerly acquisitive. Neither operator has seen any mass infections at their hotels and both have put plans in place (as a “Clean Protect” assurance and “Keep Safe” programme respectively) to provide confidence to consumers about health and safety.

Whilst a full recovery may span the next couple of years, the future seems bright for the hospitality sector and we at Rockwell look forward to leading the way. To discuss any new opportunities or share your views, please get in touch via [email protected]