After a bumper two years for staycations during the coronavirus crisis, the market is changing once again. Here, Dale Smith, chief executive of holiday lettings management company Host & Stay, shares his predictions for the UK holiday market this year.
What a difference a year makes
Last year, and the year before, were excellent for the UK holiday market, as foreign travel was heavily restricted and, for a while, banned outright.
This year, while the market remains healthy, circumstances are quite different, and we’re seeing the effects of this in the way in which people book holidays.
Spreading their wings
Firstly, we cannot ignore the fact that people are able to travel internationally again and so there is a high degree of pent-up demand. In real terms, what this means for UK rentals is they need to be competitive when it comes to rates, as, unlike the past few years, it’s a buyers’ market once again. In 2020 and 2021, as demand for UK breaks rocketed due to holidaymakers’ desperation to escape their four walls, prices rocketed commensurately. Now, the competition with a two-week package in the Med is back on, which means I’m certain we will see nightly rates ease below the highs of last summer.
Cost of living
We are entering into an unprecedented cost-ofliving crisis, with energy bills soaring, inflation rising and salaries in many sectors stagnating.
This means that many families are cutting back on luxuries, and early reports suggest that short breaks in some of the UK’s most popular destinations, such as the Lake District, are one of the early victims of belt-tightening.
However, it remains to be seen what this means for holidaymakers’ main summer breaks; whether people will forgo their longer break altogether or opt for the easier option of a week-long stay in one of the UK’s stunning destinations, such as Northumberland or North Yorkshire.
Late bookings
One trend that has remained the same, but for very different reasons, is the increasing number of late bookings we are seeing.
At Host & Stay, in the first months of the year we have seen between 60 and 90 per cent of homes being booked extremely late – often in the same month as the break – compared to historical standards.
This is similar to the previous two years, although the trend over this period has an obvious explanation in the changing travel restrictions. In 2020, pent-up demand led to a last-minute explosion in bookings once restrictions were eased, while 2021 was dominated by varying rules and regulations. With these changing rapidly, in some cases in a matter of days, many holidaymakers held out hope for a foreign break until the very last minute.
This led to a high level of late demand as plans were scuppered or rules were changed and nervous passengers decided a UK staycation was the safer alternative. Now, although the market is in a very different place, we’re seeing a similar pattern.
As CEO of Host & Stay, I sit on the board of the Short Term Accommodation Association with CEOs from Sykes, Under The Doormat, and ALTIDO, among others. We all agree that these late booking surges makes sense given the cost-ofliving crisis, and guests are waiting until the last minute (or even after pay day) to decide if they can afford to go on holiday or not.
The outlook overall
Despite some uncertainties, the UK holiday market looks healthy and I am confident it will remain buoyant over coming months, especially if the trend for last-minute bookings continues. While foreign holidays may seem like a novelty after two years of limited travel, the staycation market should not be seen as a second choice. Holidaymakers have had a taste of what the UK can offer. It may have been born of necessity in the first instance, but I believe that many travellers will continue to lean into the staycation experience, enjoying the logistical and environmental benefits of staying local.