Manchester Will Lead The Recovery Of The European Hotel Sector
The report analyses future demand expectations across each major travel segment, to identify which cities are likely to be most impacted. 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.
The United Kingdom has a high level of domestic tourism spend, making it well positioned for a more immediate recovery, notwithstanding the economic effect of coronavirus at a national level and the consumer perception of risk, which will differ by destination.
Domestic travel will be the first to see a return of activity, according to the research. This will be predominantly supported by the gradual reopening of economic markets alongside the lifting of some travel restrictions.
CBRE assumes that international demand will be slower to return than domestic demand, that long-haul travel demand will be slower to recover and that airlines will make route planning decisions that prioritises key city connectivity.
Cities such as Paris, Vienna, Madrid, Barcelona and Berlin are heavily exposed to the postponement and cancellation of large meetings and events. However, 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.
Some in the hospitality sector expect recovery to be slow. Booking.com, which has signed up for 220K SF at Allied London’s Manchester Goods Yard, has raised $4B to tide them over the period to 2022, although the FT reports that some observers think their view on how long the travel sector will be impacted is optimistic.