The pubs are open, but are Brits as excited about the reopening of the rest of Hospitality and the return of hotels?
For the first time in a while, April has allowed us to feel a sense of normality across parts of the U.K. And we’re not referring to the new normal, but the old kind. The kind that allows us to reconnect with our friends and families over our favourite food and drink. Now, with the last major milestone in England behind us, it’s time to focus on the next one, and with it, the reopening of all remaining Hospitality. With ongoing uncertainty around international travel, domestic tourism will be the name of the game in the coming weeks and months. Using forward-looking Demand360® data, Amadeus has analysed what hotel and flight bookings tell us about current traveller behaviour.
Domestic booking leads the way
Unsurprisingly, our data tells us that 77% of bookings currently are made within the UK. If we look at the split of flights vs. hotel bookings, hotel bookings have been greater than flight bookings throughout most of 2021 so far, and this number is increasing each week. This is great news for hotels, as it suggests that the pent-up demand among travellers is also translating into bookings. For hoteliers, if travellers are not flying to their destination, it’s likely they are using ground transportation or car. In your promotions or loyalty programmes, think about how you can use this to your advantage, such as through free parking or partnering with transportation companies to offer discounts. This also means that any targeted promotions should be focused on the local market.
The importance of lead times when building reopening strategies
Another important factor to consider when looking at British booking behaviour is lead times. Over the past months, we’ve spoken a lot about the changes in lead times throughout the pandemic. In the UK, we continue to see similar patterns to the rest of the world, with shorter booking windows overall. Currently, 40% of bookings are made within the 0-7-day window, of which 14% are same day bookings. However, there has also been an increase in the number of bookings made three months or more in advance, particularly when we compare with the same time in 2019. 30% of bookings are now made in this timeframe. In Ireland, where reopening plans are still less clear, this number increases to 40%, compared with just 17% in April 2019. It’s important for hoteliers to pay attention to this and begin to track these patterns to provide guidance on adjusting operations, revenue management and promotional strategies for reopening.
The impact of this lead time can be clearly seen when we look at occupancy for the next six months across the UK & Ireland. If we take a look at on-the-books reservations between May and October, occupancy in the UK appears lower in the near future than for further out in June and July.
However, between the weeks of April 4th and April 11th, occupancy increased by 9% in the UK. Aside from that, when we take a look at the current segment mix, 44% of bookings are currently Discount (i.e. from promotions, last minute rates and online discounts). We know from these week-on-week increases in occupancy that the demand for travel is there. McKinsey also report that 47% of Brits plan on spending more in 2021 to reward themselves after 2020. So, if price is not a key driver currently and demand is on the rise, hotels should try to avoid dropping rates as part of their strategies, as it will only be harder to increase these again in the longer-term.
Where are Brits booking holidays?
Finally, although we can hope for a further increase in bookings as we get closer to reopening in May, and even more so as we head closer to Summer, we can already use Amadeus Business Intelligence data to see where bookings are being made. Between the months of May and August, highest occupancy can be found in coastal destinations of Plymouth, Southampton and Bournemouth. However, that’s not to say that seaside trips are the only ones of interest. Historic sites such as Cambridge, and even some cities, like Cardiff are currently showing occupancy of between 25 and 30% in June and July. For those with properties in key cities, keep an eye on how these levels change as more venues such as concert halls and theatres open up.
The time for hoteliers to make their properties known is now. The local UK & Ireland team at Amadeus is on hand to help you as you prepare for reopening and can offer complimentary, personalised analysis and guidance on what the data is showing in your market, and how to use this to maximise revenues.