Furthermore, Google searches for ‘holiday let mortgages’ were up from 3,600 in August 2019 to 6,600 in August 2020, and remained high throughout September. While The Cumberland has seen a 27% rise in people booking appointments with its holiday let lending team between July 1 and October 22 2020 compared to the same period in 2019.
These figures are supported by the building society’s own research, which found that 83% of British holidaymakers would prefer to holiday in the UK rather than travel abroad this year, with 68% citing fears of being stranded abroad and uncertainty around Covid-19 (62%) as their main motivation for a British staycation.
Just over half (55%) of those surveyed admit to having concerns about quarantine measures with 44% noting self-isolation at their destination is a major concern.
Interestingly, a holiday at home remains the priority for the majority of Brits next year as well, with 71% of respondents intending to plan a UK holiday in 2021. So, clearly, the staycation is not just a short-term solution to the coronavirus pandemic, but a long-term option for holidaymakers and holiday let investors alike.
The issue of lockdown and evolving restrictions
When March brought a national lockdown, the hospitality sector saw revenue dry up overnight. And despite the encouraging numbers and increasing demand for a British holiday outlined above, the unpredictability of the Covid-19 crisis remains a challenge for owners and operators, with restrictions under constant review.
For the larger holiday lets, the government’s recent legislation, which legally prevents groups of more than six meeting indoors or outdoors, will undoubtedly impact bookings once again. For many, this will present challenges and further support may be required from government and lenders.
Indeed, the Treasury has announced further support for businesses where local lockdowns occur (and an extension of VAT at 5% until March 31 2021 for the hospitality industry). This is highlighted in Cumbria Tourism’s Business Reopening and Recovery Tracker, which found that, of the 145 tourism-related businesses across the county surveyed, almost half do not feel confident that their business can survive the next six months, and nearly two-thirds do not feel confident about their longer-term survival.
As well as additional packages of support being offered, it is critical for operators and holiday let owners to become agile and responsive in their planning, ensuring that any opportunity to adapt the business to meet changing demands is capitalised upon.
Rethinking hospitality in a post-Covid world
While the larger holiday lets are facing legislative challenges, boutique hoteliers and B&Bs face customer demand challenges.
Firstly, given concerns around social distancing, many holidaymakers are opting for self-catered accommodation, making the serviced market much more competitive. Secondly, ensuring serviced premises are Covid-secure may not be possible for some smaller hoteliers, especially where space is limited.
Again, being agile and adapting your business model could prove critical at this time as Brownber Hall in Yorkshire has discovered. Originally offered as a boutique hotel, owners Peter and Amanda Jaques-Walker saw their doors close at the start of March’s lockdown. During this period, the couple reviewed their business model in light of government guidance on Covid-19 secure operational matters and concluded that as a boutique eight-bedroomed hotel and 30-cover restaurant, it would not be feasible to continue in its current form.
Having welcomed large group bookings previously, they realised that letting the property out as a private let could be the best option for Brownber Hall, that would allow them to retain the character and ambience of Brownber while adhering to all guidelines. Having adapted the business to target a whole new market, Brownber Hall saw a resurgence of bookings when they reopened on August 1, with some reservations made 14 months in advance.
However, once again, Peter and Amanda are having to review their business model given the latest ‘rule of six’ legislation. Thankfully, Brownber is in the fortunate position that the majority of upcoming bookings are for groups of six or less. However, they are still reviewing their plans again given the ongoing unpredictability of this virus.
Despite the most recent change to legislation, Peter and Amanda’s agility and ability to respond to changing needs and demands is ensuring they remain in business. When thinking about the future, and given the unpredictability of the situation we are all facing, the couple are taking a more short-term approach to business planning with agility and flexibility remaining a priority.
A sector bouncing back
While new restrictions have been placed on an already squeezed sector, the rise of the staycation continues to result in a strong bounceback for many, especially those operating self-catering properties.
Jamie Cowan owns seven self-catering properties across Dumfries and Galloway and since lockdown restrictions began to ease, he has seen a complete turnaround in his business as more holidaymakers than ever are choosing a ‘staycation’. All seven properties are fully booked up until November and beyond.
What else are holidaymakers looking for?
With the knowledge that people are planning for a British holiday for the foreseeable future, along with the stamp duty cut, it’s likely that the investor market will thrive over the coming months. So how are holiday let owners differentiating themselves?
Understanding what motivates staycationers and what whets their appetite is vital. The Cumberland’s recent research revealed good views (57%), outdoor space/gardens (53%), and being close to a beach (50%) are some of the most important features and amenities to UK holiday makers.
According to Visit Britain’s Covid-19 Consumer Sentiment Tracker, a rural location is currently the most popular choice over city breaks, with The Cumberland’s Staycation research highlighting seclusion and privacy are priorities, undoubtedly as people consider it the best way to stay safe while the coronavirus continues to play a part in everyday life.
The route to market is broad
As the hospitality sector continues to navigate its bounceback, there are lots of ways holiday let owners can reach prospective holidaymakers, making their post-Covid survival more realistic.
Sites such as Airbnb and Sykes Cottages as well as other letting agents, are all proving to be an important element of the sector’s bounceback. Jamie Cowan considers the money paid to letting agents via commission is money well spent as they accept the responsibility and hard work associated with marketing and advertising his properties.
However, many owners choose to market themselves via their own website, which is also proving a success, as holidaymakers continue to seek out their perfect staycation.
The staycation is here to stay
The holiday let market is definitely recovering, with many owners reporting bookings to the end of this year and well into 2021. The new restrictions introduced will undoubtedly bring some obstacles, but overall, there are positive signs for an industry that just a few months ago, was brought to a standstill.
By showing agility, adaptability and ingenuity in the face of the evolving pandemic, and by maintaining a focus on business models, we are optimistic that the hospitality sector will continue to respond with strength and determination in order to succeed.
*Grant Seaton is senior business lending manager at The Cumberland