The impact of COVID-19 on hotel occupancy on the books

A key question in the hospitality industry is just how long will hotel bookings be affected by the COVID-19 pandemic? In short, while there is no simple answer, our occupancy-on-the-books data provides invaluable insights into the current trend of declining future demand.

The travel restrictions, lockdown measures, and severity of the COVID-19 pandemic were mirrored by declines in hotel occupancy on the books as March progressed. At first, there was a slowdown in bookings before cancellations began to come through for the short-term and were eventually outpaced by a declining number of bookings. The escalation of the pandemic has meant that, what was once an issue for the following 14 or 28 days from a March date, extended into the summer months to varying degrees in key markets.

How far does that trend extend into 2020?

To get a feel for the impact of COVID-19 across the end of 2020 and into early 2021, we’ve focussed on three markets in which we have occupancy-on-the books data for the same time last year: Edinburgh, Glasgow and Zurich. Our data is taken from our latest 365 forward data report, produced on 6 April.

Edinburgh

In the short-term, we can see that the market is much further behind where it was at the same point last year. It is not all doom and gloom, however, as in November, the market is pacing ahead of where it was last year—with 16% occupancy on the books overall compared to 10% in 2019. Although, as we have seen for so many Forward STAR markets, cancellations continue to come in for the immediate future, while the second half of the year remains relatively unaffected.

Case in point is the Edinburgh festivals which were cancelled on 1 April 2020, and we’ve only seen a small ripple in cancellations from festivalgoers, thus far. In August, there has been a 3% decline in bookings over 30 days, whereas last year produced an increase of 5% in the same period. August in Edinburgh still has the highest overall demand per month with 35% throughout the month, although it is expected that much of this will be cancelled. As we will see shortly, the same applies to Glasgow this November as the 2020 United Nations Climate Change Conference has been postponed.

There are possible green shoots for September and October, where pickup has increased by 2% and 3%, respectively, over the past month. Perhaps these green shoots will continue as the peak of coronavirus begins to flatten.

Glasgow

At the time of writing, the highest occupancy on the books sits in July, August and November, ranging from 27%-31%. However, we are expecting further decreases in November following the postponement of the UN Climate Change Conference. So far, pickup decline has reached 5% in November, but there’s likely to be more severe decreases to follow.

Similar to Edinburgh, there have been some increases in pickup—December 2020 and January-February 2021 produced overall increases in bookings of 1-2%. The average per month last year sat at 3% overall pickup.

As we round out this Scotland section, it is important to note that domestic tourism could provide a boost to both markets, if the limitations on international travel remain in place for a longer period.

Zurich

Coming from a lower demand base to Edinburgh and Glasgow, Zurich’s pickup decreases are similarly less pronounced. May and June might have produced double-digit pickup declines (-24% and -10%, respectively), but there is positivity in the occupancy on the books for October 2020 to March 2021—which is trending ahead of last year for each month in that six-month period.
 

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