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UK’s popularity and lingering fears on travel means staycations for customers likely to continue in 2022

10 01 22 lingering fears on travel means staycations for customers to continue hero

Domestic travel will continue to prove attractive, and investors are set to benefit from new entry opportunities in the hotel sector 

The boom in staycation demand is expected to continue in 2022 as customers look to holiday domestically, and hotel owners look to sit tight on their assets, predicts Colliers. 

While the latest variant of COVID-19 continues to grip the country and fears that further emerging variants could result in last minute travel restrictions being imposed by the governments at home and abroad it looks increasingly likely that the staycation boom of the last two years will continue in 2022. 

“In 2021 we saw hotel occupancy levels in cities outside of London, particularly in rural and coastal areas, perform extremely well,” said Julian Troup, head of the Hotels team at global commercial real estate firm Colliers. “There is a real belief amongst operators that the UK staycation will continue at least until the end of 2023. Many customers are still uncertain about the prospect of overseas travel, coupled with the fact that they’ve had enjoyable experience in places they have never visited in the UK before.

“While it is likely that overseas travel will return to a certain extent, some surveys suggest that consumers are considering both a domestic and international break in the next year.”

Staying put was also the trend of 2021 for hotel owners, with many holding onto their assets due to concerns that recent limited revenue reporting would result in a price discount. However despite the limited stock levels, Colliers has sold 76 hotels during the last 12 months and has seen that in prime locations, quality businesses, most predominantly leisure-based hotels, have actually exceeded pre-COVID prices.

“As we head into 2022 the prospects of distress in the sector seem to have weakened,” Julian added. “However the continued uncertainty and operational challenges have left many hotel and hospitality business owners with serious operational fatigue. 

“And whilst many hoteliers have seen occupancy and rates come back stronger than expected, many of these business are operating using short term debt provided by supportive banks. It is likely that lenders will take a tougher approach in the coming year as the Government relieves the pressure put on them to support these businesses. This may provide opportunities for investors and reduce stock scarcity which is underlining asset values at present, especially on well located quality assets. 

“There certainly remains a substantial level of interest from domestic and international investors in the market - it is likely to be another busy year."

“With few assets coming to market attention could now turn to the development side of hotels,” adds Marc Finney, head of Hotels & Resorts Consulting. He added: “Although there is a continuing rise in constructions costs, there is also a fierce competition to place money within the sector, driven by an increase in debt funded investors. It may mean development becomes a more viable option for those looking to invest, as opposed to battling it out to secure the limited assets which come to market.

“As we’ve seen the domestic leisure market has boomed over the last few years and this is expected to be sustained, so there are opportunities for developing well located experience-based hotels in the coast and country areas.”

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Julian Troup

Head of UK Hotels - Agency

Hotels Agency

London - West End

I originally trained with a long established firm of Chartered Surveyors based in Manchester and have been working in the licensed, leisure and hotel property market since 1987. I joined Colliers in 2007 to head up our UK Corporate hotel operation. I was appointed Head of UK Hotel Agency during 2011.  Since the beginning of 2003 I have sold or acquired over 100 provincial hotels on behalf of clients of asking prices ranging from £1.2m to in excess of £20m.  In addition to the managerial responsibilities, I remain focused on handling larger private and corporate hotel transactions throughout the UK.

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Marc Finney

Head of Hotels & Resorts Consulting

Hotels & Resorts Consulting

London - West End

I have thirty years experience within the hotel and resorts sector.

This covers all areas from line management within operations, consulting advisory and corporate finance and property strategies.

I have even been an owner of my own hotel which I sold at the beginning of 2007.

I specialise in new hotel development and financing solutions within the hotel sector and in Management Agreements.

Resorts are a particular passion and I have a great deal of experience with these from inception to operations

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Kim Inam

PR Manager

Marketing & Communications

London - West End

I'm a communications professional who has previously worked as a journalist for eight years covering a broad range of topics including politics, crime, health and housing in north London. In recent years I have worked in corporate communications for local authorities across London  and joined Colliers in October 2019, initially providing maternity leave cover.

I provide strategic public relations advice to various business lines within the UK organisation to secure recognition for their work in the property press as well as key target media, and work with our experts to produce thought leadership pieces which are of interest to our clients and colleagues within the commercial real estate sector. In addition, alongside colleagues in the PR and wider communications team, I provide media and social media training for our in-house experts to prepare them for media opportunities and raise their personal brand within the sector.

As well as supporting various teams within the UK business, I also I curate and edit regular content for the blog, which drives credible business leads to our experts.


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