London hotels hope for a cracker Christmas as Covid recovery lags behind rest of country

Last Minute Christmas Shoppers Crowd London Streets

London hotels are still lagging behind in their Covid recovery compared to rivals elsewhere – but have reported strong festive bookings.

The capital’s occupancy rates were 26 per cent behind pre-pandemic levels last month, as the sector continues to suffer from the slow return of international tourists and business travellers. 

Hotels are also facing a raft of challenges including skyrocketing energy costs, staff shortages and supply chain delays, meaning they cannot operate at full occupancy. 

However, London marked a slight boost to occupancy rates, rising from 65 per cent in October from 62 per cent in September, according to data compiled by STR and analysed by RSM.

Across the UK, occupancy rates have dropped slightly from 72 per cent in September to 71 per cent in October. Levels are still 13 per cent behind pre-Covid levels.

Revenue per available room across the UK was down to £69 in October 2021, significantly up from £27 in 2020, but still well behind pre-pandemic levels of £78.

Chris Tate, head of hotels and accommodation at RSM, said the sector’s recovery was being held back by some key challenges after lockdown. 

He said: ‘A shortage of staff and difficulties with supply chains continue to impact on service and many operators have been forced to turn away custom. These challenges, together with energy price increases, are eroding the bottom line at a time when operators are desperate to rebuild their balance sheets.”

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However, forward bookings data for London in December is “strong”, with families and friends keen to enjoy the festive celebrations after a subdued Christmas last year.

“As an industry, we need to focus on presenting hospitality as a viable career path to attract the best talent and address staff shortages,” Tate added.


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