Record supply levels to meet waning demand, warns PwC
London has seen the largest increase in supply since the lead up to the London 2012 Olympics, particularly of luxury high-end rooms.
Growth in demand for UK hotel accommodation is expected to stall in 2024, with the pain likely to be shared equally across London and the regions, according to PwC’s UK Hotel’s forecast for 2024.
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.
London has seen the largest increase in supply since the lead up to the London 2012 Olympics, particularly of luxury high-end rooms.
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.”
