A Consumer Demand-Side Perspective for the Hospitality Sector in the UK

Main Photo: The weekly report produced by BVA BDRC, available to THPT subscribers

Date: May 2020

Location: UK HQ, with 170 staff in offices in London, Washington DC, Singapore, Beijing, Jakarta, Sydney and Cape Town. With BVA, the combined organisation has close on to 1,000 staff, revenues of over €185m and 20 offices in 11 countries, with a strong global reach.

Who: Dr Crispian Tarrant, Chief Executive, BVA BDRC…..Cris has been engaged with the hospitality sector for more than 30 years providing a consumer perspective on the industry. As well as measuring the nature of demand and the changing dynamics of the customer journey, much of his professional work has been concerned with the development of hotel brands and their influence in the industry.

What Are They Doing: During the coronavirus pandemic BVA BDRC is undertaking a weekly UK tracker of consumer sentiment, with a focus on the travel, leisure and hospitality sectors.

His Thoughts: The mood of the nation has stabilised as we are in a ‘wait and see’ position about the easing of the lockdown. There is a real sense the country is getting through this crisis from the latest BVA BDRC consumer sentiment survey data collected 27th – 28th April. But, expectations for when we will travel on holiday and stay in hotels are again being pushed back, at the realisation that social distancing regulations are likely to be in force for many months to come.

– Confidence in HM Government’s handling of the crisis remains supportive by a ratio of nearly 2:1, with once again almost two thirds confident and rather over a third not confident, suggesting toleration with the lockdown is still largely holding
– Within the country there is a real sense that we are getting through the peak of the covid-19 disease with another large shift in perception this week. Now just 29% think the worst is still to come in the coronavirus crisis. Approaching half (46%) think things will stay the same for now, sensing we are still at a plateau phase of the curve, but already 24%, up from 18% a week ago, believe the worst has now passed
– The position in the UK is now in contrast to France, where the trend towards more positive perceptions has been halted and on some metrics even reversed. Are we being overly optimistic in the UK about how soon we will be through this? Perhaps in the absence of government milestones for lockdown release we are assuming too much about the speed of progress against the disease?
– But with reference to the longer term impact, hopes of this being a V-shaped event increasingly are giving way to the prospect of a U-shaped or even a more protracted bath-shaped recovery
– While thoughts are turning to when life will return to normal, the time frame for this is being extended and any expectations of a swift recovery are receding. Only 28% of consumers, down 5 points in a week, think this will be by August, while the proportion thinking this will not be until 2021 or later has been rising from just 14% three weeks ago to 32% currently. Increasingly the assumption is that recovery is going to be a long slog – there is not going to be a light switch moment
– Yet again fewer people are planning to proceed with current bookings and more are saying they have been cancelled and they have not committed to re-booking. Week by week the prospects for the summer tourism season are softening, definitely for international travel, and now even for domestic travel although this still is seen as being more likely to be possible
– Reflecting concerns over their own health and the need for social distancing, it is rural locations, coast or countryside, with low volumes of people that are the much the most appealing for a domestic summer holiday this year

– Expectations of summer overseas travel continues to drop, only 1 in 10 expecting to plan a trip before the summer – a fall for the 4th consecutive week
– In similar vein, expectations of when consumers will make a hotel booking again once more continue to be pushed out
– With holiday and hotel planning and booking horizons on average being around 6 months from now, we continue to foresee considerable demand from UK consumers for winter sun holidays in the 2020/21 season
– In the shorter term, the latest consumer data show more local desires such as going to the gym or to a shopping mall now recording greater numbers of people expecting to do these soon after the lockdown is eased
– With the prospect of ‘stay local’ becoming a likely post-lockdown theme we would recommend hotels within the UK think of promoting themselves within their own local areas at this time – after all it will be the fact of getting away from home at all as much as where this happens that will be appealing for many consumers. This can also be coupled with a message about stay local and support a local hospitality business
– The free to download wave 6 report is set for publication towards the end of the day on Friday 1st May

Dr Cris Tarrant- – In addition to the core UK consumer sentiment report BVA BDRC now also has a comparable consumer sentiment report for the US market and within the UK it has published more detailed sector reports for the visitor attraction and travel markets.

THPT Comment: Cris is well respected spectator on the ins and outs of the UK hotel industry. He founded BDRC in 1991 as a market research and advisory group and invited the French BVA group to come in as majority shareholder in 2018.

Download the Report: from BVA BDRC direct, free of charge

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