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UK hotels to rebound strongly post-COVID-19

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The UK hotel market will rebound strongly once the economy revives and travel restrictions are lifted post the COVID-19 pandemic, with Q4 expected to see a surge in investment volumes and a full market recovery possible in London by Q2 2021 if the market reopens by the end of Q2 2020, according to research by leading global property adviser Knight Frank.

Knight Frank’s research analyses the speed at which the UK hotel market has recovered following major events in the past, such as the economic downturns in 2001 and 2009, SARS and Brexit. These findings provide some hope for a reasonably swift return to positive growth figures, despite there still being many unknowns ahead.

Shaun Roy, Head of Hotels and Specialist Property Investment at Knight Frank, said: “The COVID-19 pandemic is an unprecedented event and there is no doubt that this will have an impact on the UK hotel market, which is disproportionately affected in many ways.

“We are currently in an enforced lock down, where the focus for the hotel market remains one of survival, with cash conservation and liquidity of immediate concern. Yet as we look beyond this, and at how the UK hotel market has fared following other significant global events, we believe that the UK hotel market will recover and rebound strongly.

“We predict that the market will bounce back following the relaxing of travel restrictions and the containment of the virus, leading to a potential full recovery in London and a gradual recovery in the regions as well as an uplift in investment volumes nationally.”

The UK hotel markets which have a strong international appeal, like London and Edinburgh, are likely to recover faster, with Knight Frank forecasting that the London market could potentially achieve a full market recovery by Q2-2021 if the hotel market reopens by the end of Q2 as a result of COVID-19 being contained and travel restrictions eased.

However, Knight Frank also predicts that the severity of the economic downturn will likely have a more lasting impact on the performance of the regional UK hotel market as corporate budgets are likely to be squeezed, whilst the level of unemployment will dictate the disposable income available and therefore the propensity to spend on leisure-based experiences.




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