While continued optimism in the strength of the UK staycation and business travel is driving record levels of hotel development, PwC said it expects 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.
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.
Simon Hampton, Real Assets leader, PwC UK: “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.”