COVID-19 Hotel Forecast: London

Summary

While many are looking backwards to compare the current market environment with the post-9/11 or 2008 Great Recession periods, Phocuswright prefers to look forward – trying to address the tough questions weighing on our collective minds.

Over the coming months, by teaming up with the data science team at LodgIQ, Phocuswright will evaluate a broad swath of hotel-related and other data across a variety of key metropolitan areas. Our key objectives are to model the:

• Level of disruption
• Duration of disruption
• Shape of the recovery curve

The goal is to understand the similarities and differences in hotel market dynamics between destinations. This is especially relevant, as some markets may have yet to peak in terms of the level of infections, while others are seeing active coronavirus case counts decline.

While London's outcomes in March were better than some, its April and May RevPAR declines fall into a similar order of magnitude – with occupancy shortfalls similar to New York and ADR declines similar to San Francisco, resulting in a comparable April 2020 RevPAR decline of 94%.

One concerning factor is that London's steep ADR decline may indicate more discounting than merely attributable to share shifts from luxury to midscale and economy chain scale properties ...