PwC: UK hotels could take 4 years to recover
U.K. hotel trading performance is set to decline significantly in 2021 due to the impact of the COVID-19 pandemic, according to research from PwC. In the bleakest outlook since benchmarking began in the 1970s, hotel occupancy rates in 2021 are forecast to be 55% across the U.K. and could take four years to return to pre-pandemic levels. The prediction forms part of PwC’s U.K. Hotels Forecast 2020-2021, analysis into market conditions for hotels over the next 12 months. Although seeing some relief to the precipitous decline of 2020, the forecast for occupancy rates in 2021 is 52.4% for London and 59.2% for the regions, assuming there will be a vaccine by next summer. This is in comparison to pre-COVID 2019 occupancy rates of 83.4% and 75.4% respectively.
European countries competing with Airbnb?
Even before the coronavirus swept across Europe, many cities had been complaining that a proliferation of short-term apartment rentals aimed at tourists through platforms like Airbnb was driving up housing costs for locals. Now that the pandemic has all but cut off the steady flow of visitors, many European cities are seizing an opportunity to push short-term rentals back onto the long-term housing market. In Lisbon, the Portuguese capital, the city government is becoming a landlord itself by renting empty apartments and subletting them as subsidized housing. In Barcelona, Spain, the housing department is threatening to take possession of empty properties and do the same.
U.S. hotel profit stuck in neutral
For the seventh consecutive month, U.S. hotels in September remained in negative gross operating profit per available room territory and at US$-9.19, it was a 34% regression from the month prior and a 109.6% year-over-year decrease, according to HotStats. September and into October are typically strong months for U.S. hotels, but the data show that year-over-year comparison is becoming less and less reliable as the pandemic goes on. RevPAR was up to US$38.11, a 7.5% increase over August that was minimally juiced by a 1.7-percentage-point increase in occupancy and a less than dollar jump in average rate.
NY investors looking to repurpose empty hotels
Some 25% of New York City’s 700 hotels are expected to close by 2023 as a result of the pandemic, experts say. At the low point earlier this year, hotels could fill only 15% of the city’s roughly 128,000 rooms. The number of rentable rooms has dropped by a third since then, to 85,000, now that more than 100 hotels have shuttered temporarily. So some investors are looking at other options.
Milwaukee hotel conversion is on hold, and for sale
Plans to convert a historic downtown Milwaukee building into a luxury hotel have been indefinitely delayed due to the pandemic, with the property now listed for sale. An affiliate of Madison-based Ascendant Holdings Real Estate bought the city’s former Humphrey Scottish Rite Masonic Center in 2017 for US$3.5 million. Ascendant planned to convert the three-story center into the hotel’s lobby, restaurant and meeting rooms, with a 14-story addition atop the building’s southern end. That tower was designed for 215 to 220 guest rooms.
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Hilton updates rewards
Hilton Honors has implemented several new program adjustments to 2020 and 2021 policies, to make it as easy as possible for pandemic-stricken travelers to hang onto their benefits. Policy changes include: extending points expiration until December 31, 2021; reducing status qualification requirements by 50% across all tiers, including stays, nights and base points in 2021, to allow members to achieve status in half the time; and lowering milestone bonus night threshold to begin at 20 nights in 2021 (it was previously 40 nights) to align with new Gold status qualification and allow members to earn rewards faster.