By Scott McKerracher, head of commercial at The Cumberland
We were interested that our recent survey revealed that 86 per cent of holiday accommodation owners say they have invested in their business during the pandemic, with 94 per cent of them indicating they have made a long-lasting, positive change.
We have a long-established hospitality lending team here at The Cumberland, and so it was important to us to survey 1,021 UK adults and 233 UK accommodation owner/managers to find out their attitudes and identify any growing trends.
Staycations have increased in popularity, as 84 per cent of consumers who responded said they were opting to holiday in the UK this summer. Of these, the survey also revealed that hotels (38 per cent) and cottages (32 per cent) are the most popular types of accommodation, followed by bed and breakfast accommodation (24 per cent).
16 per cent say they’d pay more for dog-friendly accommodation
However, COVID-19 compliance and cleanliness is still dominating consumers’ choice of accommodation providers, as 69 per cent say they are willing to pay more for hotels, B&Bs and holiday lets offering these additional services: 38 per cent said they would pay more for a property which has a COVID-19 deep cleaning service, while 31 per cent would pay more for a property with clear instructions on its COVID-19 guidance.
Perhaps alluding to the increase in lockdown puppies, 16 per cent of Brits say they would pay more if their accommodation was dog-friendly!
The findings from this national survey suggest that when it comes to destinations, Cornwall is the favourite UK destination (17 per cent) with the Lake District proving as popular as Devon (14 per cent each), followed closely by the Scotland (13 per cent), Wales (11 per cent) and East Anglia (9 per cent). However, 32 per cent of consumers indicated they are not planning a holiday this year.
Four-fifths of holiday accommodation owners questioned (80 per cent) said that they had been spending money on being compliant with COVID-19 guidelines, while 71 per cent have been improving their property or services.
This dual research amongst consumers and UK holiday accommodation owners provides really important insights into the opportunities and challenges currently faced by the British hospitality industry, as it navigates its way out of the pandemic and into the ‘new normal’.
With mortgage customers across the UK hospitality industry, including hotels, B&Bs and holiday let owners, we understand how optimism within the market can show a clear way forward for this sector.
75 per cent considering using Government Recovery Loan Scheme
When it comes to business funding during the pandemic, 52 per cent of those surveyed funded their investment in their business from savings/ equity contribution; 41 per cent from a business loan; 26 per cent from insurance; 21 per cent from external equity; 17 per cent from CBILS* or BBLS* loans and 15 per cent from remortgage.
Additionally, 75 per cent said they were definitely going to or are considering using the Government Recovery Loan Scheme, which could indicate that this hasn’t been a necessity for many, as it was only introduced in April.
We also asked them about investing in their businesses over the three years 2020-2022 inclusive and from the findings, the consistent turnover figure cited by owner managers as having invested or planning on investing in their properties is 11-20 per cent of turnover. Overall, 94 per cent of those questioned have made a long-lasting positive change to their business as a result of the pandemic. And of this, 55 per cent of respondents said that renovations were the main long-lasting positive changes the pandemic has led them to make to their business. This is followed by process improvements (46 per cent); introducing new services (45 per cent) and new IT systems (34 per cent).
Optimism and resilience
The research findings regarding the use of CBILS and BBLS is interesting and encouraging, as it demonstrates that the businesses had other means to invest for the future and the level of investment to which businesses are committing demonstrates optimism and resilience during a very challenging time and will hopefully be rewarded as consumer confidence and demand to holidaying in the UK continues to grow.
It is also interesting to note that the research uncovered changing booking patterns amongst UK consumers, with 36 per cent saying they would book UK holidays between less than one month ahead and three months ahead of time, whilst only 6 per cent said they would plan to book 10-12 months ahead. 26 per cent said they would not plan to book a UK holiday whilst in the current COVID circumstance. 56 per cent of respondents cited concerns about cancellations due to the impact of new strains of the virus as their biggest concern over the summer season, while 31 per cent of accommodation owners said that they were concerned about customers ‘double-booking’ holidays and then cancelling with them at the last minute.
It is very clear from our consumer research that a UK holiday is by far and away the main choice for British consumers this summer and it seems that many UK accommodation owners have decided to invest in their businesses not only for the short term but also to make long lasting, positive change. This can only bode well for the sector going forward, as consumer confidence rises to match.
