Despite the various lockdowns and the difficulties with inbound international tourism, the U.K. hotel sector has seen relatively limited restructuring activity since the start of the pandemic. Furlough and other government support measures have helped to cushion the blow and lenders have generally been willing to support operators. Whilst the outlook for the sector has gradually improved as the vaccination programme has rolled out and restrictions have eased, many support measures have already begun tapering off.

As such, the coming months are expected to be extremely challenging for hotel operators as they grapple with changes in customer behaviour, labour shortages and continued demand uncertainty especially from the Corporate sector.

Within this report we discuss current market performance, the industry’s view on future demand and the key challenges ahead for operators. In light of these challenges, lenders may start to see more requests for support. Therefore, this report also looks at some of the key factors lenders need to consider when assessing a request from an operator and/or their shareholder(s).

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