Around the world, hotel performance is expected to see a more meaningful improvement in the second half of 2021. This optimism is underpinned by the assumption of widespread vaccination, a fall in Covid-19 cases and an improved outlook for travel and events.

Hotels in the Middle East have shown resilience throughout the pandemic, with more promising booking data compared with other parts of the world. Dubai was virtually the only tourist destination open for international leisure travel, while Abu Dhabi hosted the International Defence Exhibition (IDEX) in person in late February 2021 with no quarantine requirements for foreign arrivals. Between March and April 2021, occupancy on the books remained at around 10–20% and, beyond those months, the metric stays below 10% with only occasional lifts.

Dubai is still set to host Expo 2020 from 1 October 2021 until 31 March 2022. However, there are currently little to no booking figures for that period as of now – the highest occupancy level (7.2%) is for a Thursday (21 October 2021). It should be noted, though, that booking windows have shrunk during the pandemic due to uncertainty and a higher volume of availability. Assuming a drop in the number of Covid cases and relaxed restrictions on travel later on in the year, demand for hotels should pick up.

Abu Dhabi’s decision to host an in-person conference showed that hotels could still benefit from these events, even if the impact was smaller than what we would have typically seen prior to the pandemic. IDEX brought double-digit increases in ADR and RevPAR to the market, even as occupancy was still down year-onyear. The highest daily ADR and RevPAR levels, along with the largest year-on-year increase, were on the first day of the conference (21 February). On that day, ADR jumped 50.5% to Dh606.80 (£119.15), while RevPAR rose 34.4% to Dh46.57 (£87.69). Occupancy hovered around 67–74%, with the highest daily occupancy level (73.7%) on 22 February, the day that also saw the steepest year-on-year decline (12.7%).

Spikes of activity in Europe

Unlike the Middle East, Europe ended 2020 in the same way as most other regions – with a record low performance. Occupancy fell to 33.1%, ADR dropped to €90.89 and RevPAR sank to €30.05.

However, STR’s forward-looking data supports the case for optimism in Europe, with visible market-level spikes around key events scheduled for the second quarter of 2021 and beyond. This data shows a significant advancement for an industry that needs to make the most of recovery.

First up there’s the UN Climate Change Conference (COP26) in Glasgow. Originally supposed to take place in November 2020, COP26 was rescheduled for 1–12 November 2021. Looking forward to early November, Glasgow’s occupancy on the books is trending at 84–89% for the event period, which is a massive jump from the sub-20% and 30% levels on the books for the rest of the year. The days before and after the conference are also showing significantly improved occupancy levels. Thanks to its proximity to Glasgow, Edinburgh has also seen booking levels of more than 30% as it captures conference overflow. Edinburgh’s occupancy rate for 3 November is currently 36% – this time last year, it was just 9%.

Confirmed reservations for the year ahead in London are still timid, with levels sitting mostly below 10%. However, the market predicts a pair of modest spikes due to large sporting events. The highest level of occupancy on the books (21%) is currently on 18 June, the day of the UEFA Euro group stage match between England and Scotland. Meanwhile, on 2 October, the day before the London Marathon, occupancy on the books sits at 15%.

Because of the pandemic, guest tendency has shifted to shorter booking windows. For these sporting events, an uptick in leisure travel – especially in the domestic market – could push levels higher in the upcoming months. Again, in Edinburgh, occupancy on the books is currently at 63% for the night of the British and Irish Lions test match against Japan on Saturday 26 June, and 57% for the night before. Match night occupancy is almost double the level from the same time last year.

While 2021 remains an uncertain and challenging time for hotels and hospitality groups, as this data shows, there are tangible grounds for hope as the year progresses.