London hotels ‘can’t change the bedsheets fast enough’ as staff shortages hold back recovery
The recovery of London hotels is being held back by staff shortages, with venues unable to change bedsheets quick enough.
One London hotel has had to slash occupancy in the week so it has enough staff on board for its popular Saturday night bookings. “They literally can’t change the beds fast enough – is it holding the market back? Definitely,” property consultancy Knight Frank’s Shaun Roy told City.A.M.
London hotels have continued to lag behind their regional peers, as overseas visitors slowly return to the capital.
London hotels’ gross profit per available room (GOPPAR) has remained 56 per cent down on their performance in September 2019, according to Knight Frank.
Elsewhere, regional hotels have rebounded with profits on par with those achieved in the pre-pandemic comparable.
Year-to-date occupancy has outperformed the 2020 occupancy rate for the same period, reaching 39.4 per cent compared to 34.1 per cent in 2020.
However, in London, year-to-date occupancy has reached 21.7 per cent, compared to 25.1 per cent for the same period in 2020.
The city’s hotels have welcomed some international visitors in recent months as restrictions have slowly eased. A flux of holidaymakers has given hotels in London “optimism for rest of the year,” particularly in luxury venues, Knight Frank’s senior analyst, Philippa Goldstein, said.
London hotels saw a 17.6 per cent growth in the average daily rate (ADR) measure in September. This was down to more arrivals from the USA, the Middle East and the EU.
London’s ADR has grown 48 per cent since the end of May 2022.
Hotels outside London benefited more from a staycation trend, with Brits unable to travel abroad opting for historic or countryside retreats.
Hotel occupancy in regional venues hit 66.2 per cent in August, while the autumn has seen an uplift in demand from people travelling across the country for work reasons.
In September, there was a “real pronounced uplift” in the London hotel occupational market, according to Roy. “That’s taken a good number of hoteliers by surprise. Things have come back quicker than they expected.”
With travel restrictions easing further this month, Roy anticipates a speedy recovery for hotels as international visitors will be keen to return to the UK.
However, hotels are also still yet to report the full impact of last month’s VAT hike to 12.5 per cent, Knight Frank’s Goldstein warned.