Sector Spotlight: The Hotel Sector Gets Ready for a Post-Covid Comeback

Alice Tuffery, writer

Published at 18/04/2021, Updated on 04/05/2022 , Reading time: 5 min

Sector Spotlight: The Hotel Sector Gets Ready for a Post-Covid Comeback — Photo © Hotel_Recovery.jpg

It’s official; the UK has started reopening the economy and the hospitality industry is gradually getting back up and running. There are some complications when it comes to the hotel sector, because many businesses offer lots of different services, but we’ve created a guide outlining the key facts and advice.

Many people are looking forward to spending time away from their homes at this point in the pandemic, and the hotel sector is ready and waiting to welcome visitors back. But reopening the economy in the industry isn’t as straightforward as it is for some other businesses. Hotels must adhere to a strict set of changing rules over the coming months.

How will hotels make a comeback post-COVID?

By now, most people are aware of the three key dates for businesses in the hotel sector in England:

Monday 12th April - Self-contained holiday accommodation, including self-catering lets and campsites can open. Hotels can serve food in outside spaces and open indoor pools to people in household groups. They can also host outdoor receptions and celebrations for groups of up to 15 people.
Monday 17th May - Hotels can open for leisure guests, who must stay in groups of up to two households or six people from different households. They can also start serving customers food indoors and host outdoor receptions and celebrations for groups of up to 30 people.
Monday 21st June - The government plans to lift all remaining restrictions, so hotels should be able to resume normal business operations, welcoming unlimited numbers of people through their doors.

Like most of the guidance delivered during the pandemic, restrictions for the hotel sector between the 12th April and the 21st June come with a few extra conditions:

Hotels can open spas from the 12th April, but certain facilities must stay closed until at least the 17th May, including steam rooms, saunas and other types of thermal suites
Hotel restaurants don’t need to impose a curfew
Hotel restaurant customers must order and consume their food and drinks while seated
Hotel restaurant customers don’t need to have a substantial meal with alcohol
Hotel restaurant customers should stay seated unless using the toilets or baby-changing facilities
Customers should maintain social distancing with other tables and groups (2m apart, or 1+ metres where 2m isn’t possible)
Customer demand ahead of the hotel sector comeback

There has been some disappointment in the hospitality sector, as the lockdown exit roadmap allows holiday lets, such as private cottages and apartments, to reopen on the 12th April. But hotels can’t welcome guests until the 17th May - a month after non-essential retailers are allowed to open their doors.

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We have invested significantly in making our premises as Covid-safe as possible; it is safer to stay in a hotel having a drink at a table, with dinner served, than it is visiting a shopping mall or a grocery store. It’s safer for people to socialise in Covid-secure hotels and restaurants rather than have parties in their flats, houses or gardens. —Raphael Herzog, Chair of the Bristol Hoteliers Association (BHA)

Although hotels can’t welcome UK customers for leisure stays until the 17th May, they’ve been hosting foreign travellers for some time now. The government has asked anyone who arrives from one of its ‘red listed’ countries to isolate in a British hotel for 10 days.

In February, the Department of Health and Social Care rushed to book 28,000 hotel rooms near airports, and ministers told businesses they’d have to welcome 1,425 guests daily.

Despite the hotel sector’s slow UK reopening, businesses in the industry still have reason to be optimistic. According to research, three quarters of people are planning to take their next overnight leisure trip this year, while just 13 percent will leave it until 2022 (STR).

What’s more, many people are likely to defer their foreign holiday in favour of a UK break. In fact, 42 percent of Brits are less likely to travel abroad while people are still getting vaccinated. And more than one in 10 people will continue to reduce the amount of international travel they organise when the pandemic is completely over (STR).

Plus, now restaurants are back open, over a quarter of Brits plan to eat out more often (CGA), which means hotels with on-site eateries can start generating revenue immediately.

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Hotel sector trends amid the UK reopening

Unsurprisingly, the situation for the hotel sector at the moment is fairly bleak. Although many people did visit hotels during the summer of 2020, domestic visitor spending in the industry was 62 percent lower throughout the year compared to 2019.

Plus, nine percent of hotels have shut their doors for good over the past 12 months. Others have managed to recoup losses by offering alternative services; for example, the YHA leased sites to local councils to help support homeless people and domestic abuse victims (CGA).

According to S&P Global Ratings, the lodging and travel sector will be one of the last industries to recover when the Covid-19 pandemic ends. And, given Europe’s 2021 air passenger traffic is expected to reach just 30-50 percent of its usual level, the hotel sector may generate half of its standard revenue this year.

However, consumer research hints at better times ahead. Restaurants, pubs and cafes saw a huge spike in demand when they first opened on the 12th April, which shows consumers are enthusiastic about getting back out and supporting businesses.

What government support is still available for businesses in the hotel sector?

Not all businesses have been able to start welcoming customers back yet - and some are still trying to recoup significant losses. So, here are the government support packages still available for companies in the hotel sector:

The Coronavirus Job Retention Scheme (open until September 2021)
The Coronavirus Statutory Sick Pay Rebate Scheme
The Vat Deferral New Payment Scheme (open until the 21st June 2021)
Business rates holiday for the 2020 to 2021 tax year covering retail, hospitality and leisure companies in England
The Recovery Loan Scheme
The Covid-19 Corporate Financing Facility
The Coronavirus Restart Grant
The Coronavirus Additional Restrictions Grant
The Local Restrictions Support Grants

Running a hotel in the franchise industry

If you see yourself as a competent hotelier, why not join the franchise industry and start running your own business? There are usually some great hotel sector opportunities for budding franchisees - so, what are you waiting for? Check out our investment openings in the travel and leisure industry today.