Global real estate advisor CBRE says that the UK cities of Edinburgh, Glasgow and Manchester “are amongst the key European cities well positioned for hotel performance recovery” post-coronavirus.
The group has published a report analysing future demand expectations across each major travel segment, which forecasts that “markets with material exposure to leisure demand and a lower reliance on both international travel (particularly long-haul) and Meetings, Incentives, Conferences and Exhibition (MICE) demand are best positioned for a more rapid recovery”.
Unsurprisingly the report forecasts that domestic travel will be the first to see a return to activity, with Germany, Italy and the UK well-positioned due to their high share of domestic tourism spend. Last year a total of 63 per cent of tourism spend across Europe was from the domestic market.
The report said that leisure travel, and in particular the staycation market is likely to see an immediate surge in demand, with countryside and rural hotels across Europe expected to benefit “as travellers will initially seek to avoid densely populated locations”.
The analysis also predicted that with international travel taking longer to return, “accommodation providers in gateway cities and airport locations will be most exposed to the limited volume of international travel demand”.
CBRE said it expects the return of corporate travel “to be limited and to remain below ‘normal’ levels for the short-to-medium term”, with companies looking to recover their financial position before increasing spend on travel.
The report also forecasts that the MICE market is likely to be the most impacted segment, with cities such as Paris, Vienna, Madrid, Barcelona and Berlin “heavily exposed to the postponement and cancellation of large meetings and events”.
But it concluded that “in the long-term these cities are well positioned to capitalise on the recovery in this segment given their availability of leading conference and exhibition space, infrastructure and connectivity”.
Commenting on the report Joe Stather, associate director, Hotels, CBRE, said:
“Previous demand shocks in the hotel market show us that not all customer segments are impacted to the same degree, or indeed follow the same trajectory in terms of recovery.
“We anticipate that markets across Europe which have previously benefitted from strong domestic leisure demand are well positioned to lead the recovery cycle.”
For our recent round-up of new and forthcoming hotels in Manchester, see: