Boutique Stays Europe Interest Pieces

What can hotels do to survive the approaching UK downturn?

It seems increasingly likely that many countries, including the UK, are heading towards a recession that could be deeper than the one felt in 2008. What is telling is that the governments of these countries are quick to blame the pandemic and the require Lockdown but are not as quick to consider their role in the situation. There are other countries that took a quicker and more proactive approach to the pandemic who have not only gotten a handle on the virus, but moved passed quarantine and Lockdown and reached a state of economic growth. If one was so inclined, one could draw straight lines between the countries the worst hit and those governments that are being lead by men who did not reach their posts by being good leaders and are more simply “figureheads” for parties only interested in making money and scrounging power. So, those leaders who have successfully prevailed against this plague should be properly credited, remembered and emulated. Well done ladies.

That’s about as political as it gets on this front. But it is easy to be angered by the situation considering how many businesses within the travel and hospitality industry are having to shut down. The Lockdown and the closing of borders affectively choked businesses within travel and hospitality to death and hotels and boutique accommodations across the UK are closing down, leaving people unemployed and burying legacies. So what is to be done?

Anne Golden, hospitality industry veteran and General Manager of Pan Pacific London, which is opening next year says that there are things that hotels can do to prepare for the economic downturn.

“Hotels are already experiencing a catastrophic downturn with occupancies and rates both significantly below the industry average,” she says, “We have already witnessed wholesale redundancies throughout the sector to reduce fixed cost. As most Hoteliers have lived through the global recessions of 2008 and 2001, they will know to creatively restructure teams to reduce management level positions and impose a hiring freeze until the outlook improves.”

She says that hopefully Sales & Marketing will not be too badly affected as Hotels will need this expertise over the next 12-24 months. Commercially, all will concentrate Sales & Marketing efforts on the domestic market in the short to medium term, constituting a repositioning for some hotels who were dependant on US business, especially prevalent in the luxury sector.

“Rates will be lowered and some will pass on discounts via the VAT reduction scheme,” she says, “Relationships will be all important and so key clients should be communicated to on a regular basis.”

As far as the lasting impacts on the industry that could considerably alter the face of travel and hospitality she says that she fears that some regional hotels may not remain viable and may fall victim to over-supply, possibly closing for good. She believes that the domestic market will grow in the short to medium term as latent fears about the safety of air-travel persist.

“We may see guests preferring to stay in slightly higher category properties or even new hotels as they may be perceived as better prepared to handle the virus. The “meetings industry” may change into a more hybrid version, technology will play a big part in enabling these new style meetings which may replace large conventions and conferences. However, overall the industry will not lose the key touch points of experience led engagement and will become more focussed on trust and authenticity.”

It is not all doom and gloom after all, because once things reach a new normality, tourism, travel and hospitality will continue and the industry will find safe and rewarding ways to make it through. But there is a hard road ahead.