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SHOCKWAVES FROM THE U . K .’ S BREXIT VOTE APPEAR TO HAVE SUBSIDED , FOR NOW . WHAT ’ S NEXT ?
By BARBARA BOHN , MANAGING EDITOR
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Since the U . K . sent its currency bouncing and stunned Europe – and many Britons – in the days after its citizens voted to exit the European Union , hotel investors and industry observers are refocusing on business as usual , tweaking their approach but not overhauling their strategies – at least not yet . Dalata Hotel Group in late September announced it had agreed to buy the operating interest in the former Burlington hotel in Dublin , now a Double Tree , and is looking to
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lease new hotels with the Maldron or Clayton brands in large cities including Glasgow , Edinburgh , Manchester and Brighton . “ However , we have set our investment hurdle criteria at higher levels to take account of the Brexit risk ,” says Dermot Crowley , deputy chief executive of business development and finance for the company , which owns , leases and manages hotels in Ireland and the U . K . That ’ s likely to slow expansion . The company is not considering selling properties and hasn ’ t seen an effect on |
booking , Crowley wants to shore up group and corporate customers in case leisure business falters .
Crowley might be reassured by PwC ’ s most recent U . K . forecast , which predicts cuts in corporate travel budgets , but not tourism , that could hit London hotels in 2017 . The consultancy forecasts 77 % occupancy rates for the rest of this year and 2017 in the regions ; London could see a year-on-year occupancy decline of 1.8 % in 2016 and a further decrease of 0.8 % in 2017 , taking
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ROOM occupancy down a percentage point to 80 %.
“ I don ’ t think London will disappear overnight ,” says Russell Kett , chairman of consultancy HVS . “ I think the U . K . will still be an attractive place to do business .” Kett is “ cautiously optimistic ” but says fewer deals will be done this year . “ We expect the yearend to have a sort of € 11 billion to € 15 billion investment for European hotels ,” compared with about € 26 billion in 2015 , he says .
“ London has very high barrier to entry in term of opening new
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