Hotels reopen to minor improvements as VAT rate slashed
 
Hotels reopen to minor improvements as VAT rate slashed
13 JULY 2020 7:49 AM

With hotels reopening in England and Northern Ireland, performance levels showed a slight improvement, although only during the initial weekend, according to STR’s Thomas Emanuel.

LONDON—All hotels in England and Northern Ireland have been allowed to reopen at their owners’ discretion. Hotels in Wales and Scotland will soon follow on 11 July and 15 July, respectively.

In an overview of United Kingdom and Europe hotel performance for the week of 29 June to 5 July, STR director Thomas Emanuel said reopening has already resulted in slight changes to hotel performance levels. All markets in the countries that allowed their hotels to reopen recorded an occupancy of 28% on 4 July. This is a noticeable improvement over the 17% levels shown in the previous two Saturdays, while Sunday saw a 5% improvement to 23%.

(STR is the parent company of Hotel News Now.)

Unfortunately, performance on that following Monday saw no improvement over the prior two Mondays.

The hope is that this weekend is not just a flourish from those guests determined to get out of their homes as soon as possible.

All eyes will be looking to the weekend of 11-12 July to see if there really is an uptick on leisure demand, Emanuel added.

For the week analyzed in this video—that is, mostly before the reopening dates, the weekend noted above being its last two days—average daily rate did not show marked improvement, coming in at a 46% decline to the same week in 2019. Revenue per available room for the same period saw a decline of between 79% and 88%.

For all of June, occupancy across the U.K. was 24%.

Emanuel said there is more hope in the announcement by the U.K. Chancellor of the Exchequer, Rishi Sunak, to reduce the rate of value-added/sales tax on hotel stays and restaurant bills from 20% to 5% for six months.

For more of Emanuel’s insights into U.K. performance data, watch the video below:

Editor’s note: The video included in this article was filmed Thomas Emanuel, director at STR, on 9 July and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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