New research from building society The Cumberland has revealed that 86% of holiday accommodation owners say they have invested in their business during the pandemic, with 94% saying they have made a long-lasting, positive change.
And despite recent government plans to relax foreign travel, the research suggests there is still caution amongst UK holidaymakers, with 84% opting to holiday in the UK this summer. Of these, the survey also revealed that hotels (38%) and cottages (32%) are the most popular types of accommodation, followed by bed and breakfast accommodation (24%).
However, COVID-19 compliance and cleanliness is still dominating their choice of accommodation providers, as 69% say they are willing to pay more for hotels, B&Bs and holiday lets offering these additional services: 38% of respondents said they would pay more for a property which has a COVID-19 deep cleaning service, while 31% would pay more for a property with clear instructions on its COVID-19 guidance.
Perhaps alluding to the increase in lockdown puppies, 16% 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%) with the Lake District proving as popular as Devon (14% each), followed closely by the Scotland (13%), Wales (11%) and East Anglia (9%). However, 32% of consumers indicated they are not planning a holiday this year.
Commissioned by The Cumberland, the survey of 1,021 UK adults and 233 UK accommodation owner/managers also highlighted that four-fifths of holiday accommodation owners questioned (80%) said that they had been spending money on being compliant with COVID-19 guidelines, while 71% 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’,” said Scott McKerracher, Head of Commercial at The Cumberland. “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.
“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.”
When it comes to business funding during the pandemic, 52% of respondents funded their investment in their business from savings/ equity contribution; 41% from a business loan; 26% from insurance; 21% from external equity; 17% from CBILS* or BBLS* loans and 15% from remortgage. Additionally, 75% 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.
The respondents were asked 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% of turnover. Overall, 94% of those questioned have made a long-lasting positive change to their business as a result of the pandemic. Of this, 55% 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%); introducing new services (45%) and new IT systems (34%).
Grant Seaton, Senior Business Lending Manager at The Cumberland, says “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.”
Commenting on the investment figure, Grant adds, “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.”
Regarding the booking patterns amongst UK consumers, 36% of respondents say they would book UK holidays between less than one month ahead and three months ahead of time, whilst only 6% said they would plan to book 10-12 months ahead. 26% said they would not plan to book a UK holiday whilst in the current COVID circumstance. 56% of respondents cited concerns about cancellations due to the impact of new strains of the virus as their biggest concern for the 2021 summer season, while 31% of accommodation owners said that they were concerned about customers ‘double-booking’ holidays and then cancelling with them at the last minute.
James Wilkinson, owns the Three Shires Inn ten bedroom hotel in Little Langdale, the Lake District. He says: “We have found that this year, people are, on the whole, looking for more comfort and luxury with a growing demand for larger bedrooms. Like many UK accommodation owners, we have taken the time over lockdown to make long lasting improvements to our property to meet the anticipated needs of consumers. For example, we had one suite before the pandemic, but we’ve developed two more of our bedrooms into suites recently, because that is where the demand lies amongst visitors, and because of course, these rooms generate higher revenues for us.
We’ve found that the pandemic has slightly changed people’s perceptions of what they want. There isn’t as much concern about any extra costs involved, but a real requirement for relaxation and comfort. Our main market is walkers and climbers but even they seem to have taste for a little bit of luxury now!
Developing the two new bedroom suites in our property was a significant investment for us, but we could see that that is the way the market is going. And because of the extensive lockdown, we had time to make these changes to the bricks and mortar of our business.”
Commenting on the popularity of the Lake District, James continues, “It is always consistently busy and a haven for stressed-out people who just want to relax in beautiful countryside, but this summer is definitely up on our normal occupancy levels – we were almost completely full in June and anticipate the same in July”