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COVID-19: Impact on forward hotel bookings in key EMEA markets

To provide a forward-looking view of the COVID-19 impact on hotel performance, STR utilized data from Forward STAR and analyzed business on the books for seven key EMEA hotel markets: London, Dubai, Brussels, Amsterdam, Zurich, Dublin, Edinburgh. 

We first looked at data processed on 2 March, then examined 5 upcoming time periods: 

  • Next weekend
  • Next 7 days
  • Next 14 days
  • Next 28 days
  • Next 83 days 

Forward STAR data is processed on a weekly basis for the next 90 days as well as once a month for the next 360 days. For the five time periods above, we compared demand pickup trends with year-to-date averages for each market. Our findings were quite interesting.

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Booking pace slows significantly across EMEA markets

The time period that stood out was “Next 14 days”—as of 2 March, the pickup of room bookings for the next 14 days for those hotels participating in our Forward STAR program. That pickup was compared with the YTD average for the “Next 14 days” for each of these markets. As shown, Edinburgh is the outlier with an almost like-for-like pickup. 

“Next 14 days” vs. YTD average

  • London: 6% vs. 11%
  • Dubai: 4% vs. 11%
  • Brussels: 3% vs. 9% 
  • Amsterdam: 3% vs. 8%
  • Zurich: 0% vs. 9%
  • Dublin: 0% vs. 8%
  • Edinburgh: 7% vs. 9%

Dubai is a market with extremely short lead times, so it is no surprise that the drop in pickup has occurred. The market picks up business in a really short window, unlike other markets that build over a longer period of time. 

In Brussels, the EU parliament cancelled all events for the next 3 weeks—events that normally attract thousands of visitors.

Amsterdam is a key fair destination and host of several events. Any planned visitors from Asia are unlikely to travel for these events during the coming weeks. The Dutch government has, however, confirmed that there are plans to cancel events at the moment.

In Zurich, we see 0% pickup for the “Next 14 days”; for “Next weekend” and “Next week,” pickup is only at 1%. The Swiss government ordered a cancellation of all events that were of 1,000 people and above. The most prominent cancellation was the Geneva Motor Show.

In Dublin, the most prominent cancellation was the Six Nations Rugby match due to take place this coming weekend. The market’s booking pace appears to be affected by COVID-19 concerns for the “Next two weeks” as well.

In many markets, hotel lead times are short. A majority of bookings come in a short window, mostly within a week to two-week period. With the spread of COVID-19, guest booking patterns are starting to change. Will there be an even shorter window or are individuals postponing all travel for the time being?

In this next slide, we look at forward demand levels for the same seven markets, specifically business on the books for the same 5 time periods as previously mentioned, once again compared with their YTD averages.

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Markets showing lower forward demand compared to average

In London, the forward demand levels are at 58% for the “Next two weeks”, compared with a YTD two-week forward demand average of 63%. And so it goes for the rest of the markets.

In the previous slide we saw that London’s pickup had declined like other markets, however as the market’s business-on-the-books base has been built out over further time, the forward demand declines are not as pronounced—especially compared with Dubai and its shortened lead times. 

Dubai stands out with lower than normal levels of forward demand compared with YTD averages. It is worth mentioning that Dubai continues to see high levels of supply growth, which will also impact levels of business on the books. Total-year 2019 supply growth for Dubai was 10%, according to STR’s AM:PM platform.

In a previous slide, we see a decline in pickup for Dublin. However, it is encouraging that forward demand for the “Next two weeks” is higher than the market’s YTD average.

Edinburgh is another market bucking the trend in terms of both pickup and forward demand. Whilst there are declines in booking pace, it is not as pronounced as other markets. For the next 90 days ahead, this can be attributed to that no major events have been cancelled as yet. For instance, the Rugby Six Nations match (France vs. Scotland) this weekend has not been cancelled as Edinburgh welcomes hosts of French visitors. 

As STR continues to grow Forward STAR participation, those markets that started early with their submission see the added benefit of year-over-year comparisons. There we are able to analyze Zurich, Edinburgh and Dublin year over year, looking for like for like time periods. For example, we measure pickup for the period starting 2 March 2020 against the same time last year (STLY). And in the next three slides, we look at all five time periods and compare the differences from this time last year.

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Zurich pickup significantly dropped compared to STLY
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Edinburgh showing resilience, in part, due to six nations
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Dublin negatively affected by six nations match cancellation

Visit STR’s COVID-19 landing page for hotel performance insights in other regions of the world.