UK’s ‘staycation’ summer fails to lift hotel profits as costs climb

{"text":[[{"start":8.48,"text":"Hoteliers have warned that a last-minute rush by UK holidaymakers to swap trips abroad for “staycations” is not translating into profits as the hospitality sector’s costs continue to climb."}],[{"start":20.24,"text":"Revenue per available room — a key metric in the hotel industry — was up 4.6 per cent in June, the fastest year-on-year growth since last September, according to figures from analytics company CoStar."}],[{"start":31.96,"text":"That growth was driven largely by coastal and rural markets, buoyed by domestic staycations, as well as event-driven tourism in cities such as Glasgow and Cardiff, according to CoStar analyst Cristina Balekjian."}],[{"start":44.48,"text":"Country Creatures, which runs four boutique pubs and hotels in the Cotswolds, was “ahead on bookings” compared with last year, a trend that co-founders Georgie and Sam Pearman attributed to European heatwaves and wildfires encouraging affluent holidaymakers to stay in the UK."}],[{"start":60.46,"text":"“It is, of course, still very hot here in the Cotswolds, but less so than mainland Europe and more manageable,” said Pearman, adding that the company had “never had more enquiries about air-conditioning”."}],[{"start":71.46,"text":"Fears of disruption due to the war in Iran slowed overseas travel bookings earlier this year. While international travel outside the immediate region has largely returned to normal, some families had already booked holidays staying within the UK."}],[{"start":84.68,"text":"London, however, lagged the wider market as it grappled with a continued slowdown in high-spending visitors from the Middle East."}],[{"start":null,"text":"

"}],[{"start":92.08,"text":"But hoteliers and holiday park operators said the rise in domestic travel had not been sufficient to offset rising costs such as larger payrolls, maintenance costs and energy bills, weighing on the hospitality sector."}],[{"start":105.76,"text":"Increases to the minimum wage and National Insurance contributions, implemented last April, had pushed up payroll costs at Grupo 44 by about £280,000 over two years."}],[{"start":116.48,"text":"“You can be full and busy and still not make a penny,” said Natalie Isaac, a director at Grupo 44, which owns three restaurants and a boutique hotel in south Wales, as well as a restaurant in Bristol."}],[{"start":126.6,"text":"UK consumer spending on travel declined year on year every month between March and June, breaking a pattern of five years of continuous growth since Covid-19, according to figures from Barclays."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":139.24,"text":"That decline was particularly sharp for airline tickets, which dropped 5.7 per cent in June, while spending on hotels and accommodation actually increased, suggesting holidaymakers were opting to stay closer to home."}],[{"start":152.92,"text":"Matt Fox, chief executive of Snaptrip Group, a collection of UK-focused accommodation booking sites, said the “trickle-down effect” of consumers swapping international travel for UK summer holidays was “real” but not enough to offset a “hard summer”."}],[{"start":168.98,"text":"He added that a recent rush of last-minute bookings was “just bringing things back up to OK”."}],[{"start":174.78,"text":"Sunnybrae Holiday Park, on the Isle of Luing in Scotland, said a late “influx” of bookings had brought much-needed relief. “We’re just as busy as we were last year but we weren’t sure it would happen,” said managing director Tiani Jaffrelot."}],[{"start":189.04,"text":"There were signs that customers were still conscious of their spending. More guests this year had opted for three- or five-day breaks at Sunnybrae compared with the typical stay of “a week or more,” she added."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":200.4,"text":"Other operators were more upbeat. Josh Summers-Stevens, general manager at Somerset-based pub and boutique hotel The Three Horseshoes, said he had sold more rooms this summer than any year since the site first opened in 2023."}],[{"start":215.12,"text":"But hospitality operators warn that plans to impose a so-called “tourism tax” on overnight stays could undermine the growing popularity of domestic travel in the UK."}],[{"start":225.4,"text":"“Uncertainty around overseas travel means there’s a real opportunity to back UK staycations but introducing a tax on holidays will have the opposite impact,” said Jon Hendry Pickup, chief executive of holiday camp operator Butlin’s."}],[{"start":239.72,"text":"Edinburgh last month became the first city in Scotland to implement a visitor levy, charging a 5 per cent fee on overnight bookings in hotels, bed-and-breakfasts and self-catering accommodation."}],[{"start":251.44,"text":"Aberdeen and Glasgow are planning similar percentage-based charges, while cities in Wales that implement visitor levies will use fixed rates of £1.30 per person for hotels and holiday lets and 75p for campsites and shared accommodation such as hostels. The UK government has also announced plans to allow local mayors to impose similar levies in England."}],[{"start":273.92,"text":"Carl Kodurand, director of the Lincoln House Hotel in Cardiff, where the city council will implement a visitor levy from next April, said he expected “a dampening effect” on bookings because “money in people’s pockets is already tight”."}],[{"start":286.44,"text":"Recent growth in the UK’s hotel sector had come through charging higher rates rather than filling more rooms, said Balekjian, of CoStar. Levies risked denting this growth, she warned."}],[{"start":297.82,"text":"Isaac feared the visitor taxes would have to be absorbed by already stretched hoteliers. “There’s a point at which people won’t pay: you’ve got to hold prices at that level and take the hit yourself.”"}],[{"start":308.26,"text":"The new levies were just the latest in a barrage of costs to hit the hospitality sector, said Isaac, of Grupo 44, adding she was already “fielding complaints about prices” from guests who “don’t really understand the pressures” businesses are facing."}],[{"start":322,"text":"Isaac added: “I’ve never said before that my aim in life is to break even — but that is now the real target.”"}],[{"start":333.12,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786135567_9441.mp3"}