Green shoots of recovery for UK's hotels as they recover from pandemic

The research from PwC found that the UK hotel trading performance is set to improve in 2022, after the most volatile period since benchmarking began.

Although there are encouraging signs for hoteliers, trading is still not anticipated to return to pre pandemic levels by the end of 2022.

Staycations are expected to provide a significant boost for coastal and leisure destinations, the study concluded.

The prediction forms part of PwC’s UK Hotels Forecast 2021-2022, which provides analysis into market conditions for hotels over the next 12 months.

A spokesman said: “The forecast for occupancy rates by the end of 2022 in the regions is between 87% and 96% of pre-pandemic levels compared to London where the forecast is between 70% and 90% of pre-pandemic levels.”

Sam Ward, UK hotels leader at PwC, said: “The speed of recovery in the capital is likely to be dependent on major tourism and the speed at which business travel returns as markets lift their own restrictions on citizens travelling to the UK.

“Hotels must continue to innovate and adapt to the markets available to them. Many businesses have publicly stated their ambitions to cut business travel even as restrictions are lifted.

“Hotels that previously focused on the business market should think about how to capture domestic tourism, looking at this as a real opportunity and, as it returns, the international tourism market. In what could be described as a perfect storm, a raft of operational cost increases coincides with the increase in the rate of VAT next April.

"Recovery will not be easy or straightforward, but with the right planning and strategy, hotels across the UK can look forward to significantly better trading over the next 12 months.”