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Thursday 13 August, 2020
TOP STORY
Hospitality sector "worst hit" by Covid-19 pandemic as UK enters "largest" recession
Figures released by the Office for National Statistics [ONS] show that the hospitality sector has been the "worst hit" by the Covid-19 pandemic, as the UK falls into its "largest" recession.
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Editor's comment
13•08•20 Welcome to the latest ShortTermRentalz newsletter!
• Figures released this week by The Office for National Statistics [ONS] that showed that the hospitality sector was hit worse than any other sector by the Covid-19 pandemic will come as no surprise to those within the space but the scale of the economic decline that has seen the UK slide into its "largest" recession on record makes for grim reading.
As chancellor Rishi Sunak warned the British people of "very difficult and uncertain" times ahead, gross domestic product [GDP] fell by 20.4 per cent in Q2 [April to June], marking the second consecutive quarterly decline and the largest slump ever recorded in a quarter in the UK.
The revelation that accommodation bookings were 92.2 per cent down on February is a deeply troubling, if unsurprising, statistic and while those figures will inevitably have picked up as restrictions eased over June and July, any rebound should be caveated by the fact that the furlough scheme of job subsidies cannot go on forever. As that is due to end in October, companies operating in the short-term rental space will have had to evaluate the extent to which they have pivoted their business model to navigate the economic downturn.
One firm that has been biding its time during this pandemic is Airbnb, which is now rumoured to be preparing to file for its IPO later this month, with help from the likes of Morgan Stanley and Goldman Sachs Group.
The unexpectedly rapid development backs up earlier suggestions that Airbnb was seeking a quick-fire route to the stock market, perhaps in the shape of a merger with a special purpose acquisition company [SPAC], after growing concerned about the length of the IPO process.
However, after laying off 25 per cent of its global workforce and raising $2 billion in equity and debt since its nadir in March, the long-awaited IPO may actually be coming at an opportune moment, given US-listed IPOs have already raised over $60 billion this year. If it pulls this off, Airbnb will be able to position itself as one of the firms to lead the rebuild and "redistribution" of the travel sector that CEO Brian Chesky is anticipating, and in doing so, may leave other ailing OTAs trailing in its wake.
• Don't forget to register for the next webinar in our Urban Living series, which takes place on Wednesday 26 August at 2pm BST, when the panel will be discussing: Placemaking - overvalued buzzword or under-utilised pursuit?
Joining host George Sell, editor-in-chief at IHM, will be:
• Michael Goldin, director, NoiseAware
• Peter Heule, CEO, Short Stay Group and Yays
• Eliza Liepina, head of product and business development, alternative accommodations, Roundhill Capital
• Francesca Howland, co-founder, Bimble
Click here to register for the no cost webinar.
If you have a story you want us to tell the industry, please click here and get involved with the community by joining our ShortTermRentalz LinkedIn group here.
Paul Stevens, editor
paul@internationalhospitality.media
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