Following the HVS and EP Business in Hospitality co-hosted webinar last week, it was revealed that hotel values will likely not make a full return to pre-pandemic levels until 2025.
As vaccine rollout programmes gain momentum, with around half the world’s population said to have now received at least one dose of the vaccine, industries such as travel, tourism and hospitality are looking forward to a much-anticipated recovery. It could, however, take some time, if discussions around a co-hosted webinar held by hotel consultancy HVS and EP Business in Hospitality are correct.
While all signs are pointing to a global recovery, regional consultants from Europe, the Middle East & Africa, Asia-Pacific, India and the Americas have provided insights into the impact of the Covid-19 pandemic on hotel performance. This means that the rate of recovery happens at a different pace in each region.
“The pace of recovery is uneven throughout. Hotel values are showing the initial signs of recovery thanks to improving cash flows, driven by demand recovery and coupled with cost-cutting measures although, the ending of government subsidies, a rise in inflation and payroll pressures could prove challenging to many hotels’ profitability. We expect European hotel values to have recovered to 2019 levels by late 2023, early 2024 in the best cases, with others following one to two years later,” noted Sophie Perret, a senior director at HVS London.
Africa and South Africa
According to one report, hotels across the Middle East and Africa appear to be starkly contrasting. As an example, hotels in Makkah, Saudia Arabia, saw RevPAR rates rise 127.5% in 2021 compared to 2020 levels, while the much slower recovery in other parts of Africa was as a result of the slow rollout of the Covid-19 vaccine.
In mid-October, StatsSA released its latest figures relating to tourism and migration. These show that South Africa’s hotels achieved 20% occupancy during August, with income from accommodation increasing by 119% from the previous year. The majority of this growth was seen three months prior, with the figures indicating that: “Income from accommodation increased by 237% in the three months ended August 2021 compared with the three months ended August 2020.”
In addition, “Seasonally adjusted income from accommodation increased by 33,1% month-on-month in August 2021. The largest positive month-on-month growth rates were recorded for guest-houses and guest-farms (64.6%) and hotels (57.1%).”
