Analysis of Booking Pace Recovery in the UK

With booking pace on the rise for most of the UK, what is the new short-term rental landscape looking like in this recovery period? In this blog, we’ll be sharing the latest data from all over the UK and highlight how markets have changed over the past few months.

Booking Activity vs. COVID-19 Case Update

ADRs by Bedroom
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As daily new cases of COVID-19 have decreased significantly since early April in the UK, new short-term rental bookings are on the rise. The chart above paints a picture of the first half of 2020 for the UK and the initial wave of COVID-19 cases that arrived in early March. Also included in the chart is a weekly overview of year-over-year change in booking pace between urban and rural markets. From early February to mid-June, we can see that total bookings were down for most of the UK, especially in cities as the virus began to spread quickly.

Booking pace in urban centers and cities throughout the UK still remains low today compared to the same period in 2019, while rural markets are dominating booking pace growth and the majority of the booking activity rebound. In our May blog post, Betting on Summer Rentals in the UK, we stated that high booking pace and low cancellation rates compared to the rest of the world were promising for the UK, and that point still holds true today. While the UK now permits more tourists to arrive in the country without isolation, international travel is still low compared to before the pandemic. A lot of recent travel in the UK has been attributed to domestic travel, as locals look to spend time outside of their homes throughout the summer, especially in rural holiday markets.

While overall bookings are on the rise across the UK, individual market performance can better be analyzed by looking at year-over-year changes in both occupancy and ADR over the past few weeks.

Average Daily Rate & Occupancy Rehabilitation

ADRs by Bedroom
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The above scatter plot shows UK market performance between 1 June and 15 July using year-over-year changes in average daily rate and occupancy. Here we can see which markets are performing the best (high occupancy and ADR growth) compared to underperforming markets with low occupancy and ADR levels.

Upon initial review, markets like Yorkshire Moors, Cornwall, and Devon appear to be thriving during this rebound, while other markets like London and Liverpool are still behind 2019 in ADR and occupancy. This data also aligns with the rural versus urban comparison we can see broadly across the United Kingdom. There is, however, more that can be taken away from this type of data, especially in some of the outlier markets.

This ADR versus Occupancy data is representative of a specific time period, starting at the beginning of June, when most property managers had already revisited their entire business strategy, and pricing strategy, for the year. Markets like Birmingham, York, and East Kent all experienced significant decreases in ADR alongside increases in occupancy, potentially leaving money on the table by not increasing prices as demand rebounded. Inversely, Swansea and Aberdeen saw massive year-over-year increases in ADR but still lost out on occupancy compared to 2019, an indication that pricing was too high in response to increased demand.

Travel Consumer Confidence & Lead Time

ADRs by Bedroom
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When news of travel restrictions and shelter-in-place orders started to escalate in late February and early March, many people canceled upcoming bookings and were hesitant to reschedule or make any plans for the future. The above chart details how many bookings per day were booked within 3 different windows, either 0-30 days before arrival, 30-60 days, or more than 60 days before arrival, compared to 2019. As you can see in mid-March, bookings made more than 60 days out decreased dramatically compared to the same period last year, and bookings made within 30 days of arrival increased. This instance shows the initial consumer reaction to the pandemic as people stopped booking for far-out dates and were only certain of traveling within the next 30 days.

Looking at the chart data for the beginning of July until now, we can see that booking lead times have come closer to more normal pre-pandemic levels. There are some noticeable differences, however, as bookings made 30+ days in advance now remain above 2019 levels, and bookings made within 30 days prior to arrival are down about 20%.

This type of data is important to consider at a market level and for individual listings, as focusing on when people make bookings can factor into your pricing strategy. If you know the majority of travelers are booking within the next 30 days, you can utilize last-minute discounts to stay ultra-competitive in your market and maximize revenue. Inversely, if you know most people are booking at least 30-60 days in advance, you could try adding a premium to farther out dates to try and increase ADRs, while still leaving time to sell perishable availability if need be.

What’s Next?

While bookings are on the rise in the UK, the travel industry still has a long road of recovery ahead. With consistent uncertainty about how the pandemic will continue to affect travel and business moving forward, it’s important to stay agile with your strategy and adapt alongside current demand as much as possible. Travel consumers have changed the way that they book stays, so property managers need to adapt as well. Taking insights from recent changes in ADR and occupancy can help show where people are traveling and how much they are willing to pay, which can help you adapt your pricing and revenue management strategy to maximize revenue potential in this new normal.

For real time insight into your market, be sure to check out our Coronavirus support page and subscribe to our weekly Beyond Brief. If you'd like to learn more about how Beyond Pricing's dynamic pricing solution can help your business navigate these uncertain times, be sure to give us your information here and we'll set up a time to chat.