Store Openings and Closures 2024
A long-term view of openings and closures: a move towards stability?
Record supply levels to meet waning demand
Growth in demand for UK hotel accommodation is expected to stall in 2024, with the pain likely to be shared equally across London and the regions.
While continued optimism in the strength of the UK staycation and business travel is driving record levels of hotel development, we expect this to be met by waning demand. The PwC UK Hotels Forecast 2023-2024 shows this increase in supply comes as the post-Covid 'revenge travel' bounce fades, inflationary pressures reduce and the UK economy sits firmly in the doldrums.
London has seen the largest increase in supply since the lead up to the London 2012 Olympics, particularly of luxury high-end rooms. Meanwhile, new supply in the regions is almost twice the historic average level of 1% of new supply. This large supply increase across the UK prompts the risk of oversupply, in some locations, in the short term - given the forecast slowdown in demand levels in the regions for 2024.
“We expect the surge in new development to come to fruition just as demand wanes - with consumer spending down and pressure on businesses to curb their budgets in line with ESG targets. But unlike in previous years, the outlook for slowing growth in demand in 2024 will be felt right across the UK.”
Simon Hampton
Real Assets Leader, PwC UK
UK Hotels Forecast 2023 - 2024 in numbers
Taking action
The are a number of actions we believe hoteliers and investors can take to prepare for the year ahead:
- Engage with lenders
- Address valuations & liquidity
- Consider productivity & investment
Engage with lenders
Higher rates are here to stay, therefore hoteliers and investors need to actively engage in conversations with existing lenders keeping them informed of ongoing performance, particularly those who will be refinancing within the next 12 - 18 months.
Related content
5 results
PwC Consumer Sentiment Survey - Autumn 2024
After the biggest drop in over two years, consumer sentiment has reached 2024’s lowest level. While economic indicators remain strong, with inflation stable, real wages increasing and more interest cuts likely, this hasn’t translated into optimism among consumers.
UK Economic Outlook July 2024
In the latest edition of PwC’s UK Economic Outlook, we explore how viable the aim of ‘highest sustained growth in the G7’ is and whether the UK’s long-term structural issues can be overcome.
Sharp rise in labour costs and slowing demand put spotlight on cost control and profitability margins for UK hotels in 2024
The impact of the increase in the National Living Wage (NLW) on labour costs in 2024 is forecast to hit UK hotels, particularly in the regions. This will put the spotlight once again on the need for top line growth and smarter cost control to maintain or improve profitability.
Contact us
UK Hospitality, Sports & Leisure leader, PwC United Kingdom
Tel: +44 (0)7710 627834
Follow us
