The hospitality industry has changed so much in recent years as businesses face increasing pressures. From the Covid pandemic to the cost-of-living crisis, to increased operating costs and staff shortages, the sector has faced significant challenges.
The UK’s holiday let market is just as impacted as any others in the hospitality sector, undergoing notable changes as emerging trends, such as fluctuating occupancy rates and evolving consumer preferences, giving rise to both opportunities and challenges for property owners.
In a constantly changing market The Cumberland Building Society, which holds more than 20 years’ experience of supporting hospitality businesses, is well placed to offer tailored financial solutions and expert guidance to help holiday let owners navigate the current landscape.
With a people-first approach, driven by our Kinder Banking purpose, where customers are supported by real people, our ambition is to help holiday let owners to thrive.
A recent report from Host & Stay paints a mixed picture for the holiday let market, but there is room for optimism. While the year started off slowly, with occupancy rates looking sluggish when compared to the previous year, the spring months saw a significant turnaround.
Indeed, March 2024 exceeded market expectations, reaching a 45% occupancy rate to surpass the budgeted 26% occupancy. April followed the upward trend with 52% occupancy for holiday lets, and May added to the positive trajectory with a 59% rate against a 51% forecast. It makes for pleasing reading to see they are all ahead of last year, and the figures point to a resilient market.
The report also highlights a growing trend where guests are booking their stays much closer to their travel dates. In May, for example, 18% of occupancy was gained within the month itself, and shows that flexibility from holiday let owners is an important trait which will pay dividends when it comes to maximising their occupancy.
Holiday let owners should also be mindful of changing consumer behaviour in the holiday let market and look to adapt where they can. According to Host & Stay’s report more people are opting for shorter stays, typically around four nights, with fewer guests now booking traditional seven-night stays.
This shift towards shorter, more flexible trips is reshaping the market, and owners who adapt by offering and managing more frequent bookings will likely see the rewards. Plus, daily rates are gradually increasing, which can help ease some of the financial pressure from rising loan interest rates and other costs.
While there is room for cautious optimism based on the report’s findings, challenges remain. Host & Stay’s report noted that 27% of holiday let properties are being put up for sale, as owners struggle with the issues outlined earlier. Moreover, the expected increase in regulation could lead to further exits from the market, potentially reducing supply but also raising the standards required to succeed.
Additionally, the increase in available properties coupled with growing demand means that competition is likely to intensify, and holiday let owners who can diversify to offer a unique experience will be well placed to take advantage of travellers looking to get the most out of their experience.
It’s essential for owners to stay on top of managing their properties to make the most of new opportunities and trends as they come up.
At The Cumberland, we understand the current market represents a challenging environment. We believe that our services should provide expert advice from the outset, supporting prospective and existing holiday let owners with their financial requests. Offering a friendly service, delivered by real people, we drill down into the needs of our customers and their business to support them.
With a strong track record of working closely with property owners, we utilise our 20 years’ experience in the hospitality sector to guide our customers, providing them with tailored mortgage products and financial advice in a personal manner that takes into account the unique dynamics of the holiday let market, helping them to rise to financial pressures and market uncertainties.
The holiday let market is both promising and challenging for property owners and the recent trends highlighted in the Host & Stay report underscore the need for careful management and strategic planning.
Whether it is managing cash flow, adapting to market and consumer trends, seeking stability, or seizing opportunities, we’re on hand to support with a personalised service and deep market knowledge which provides a strong foundation of support, allowing holiday let owners to stay agile, informed, and proactive in manging their properties.
Grant Seaton, Head of Intermediary at The Cumberland, said: “Supporting holiday let owners and all businesses owners operating in the hospitality sector means we must stay abreast of the latest trends which are affecting the market, enabling us to provide the best possible service to our customers by building strong, personal connections.
“As an organisation we are deeply rooted in the holiday let market and the communities we support. The research conducted by Host & Stay is invaluable to us in maintaining our knowledge of the holiday market, enabling us to provide the best possible service to our customers through our people-first approach.
The early signs of change in the market are promising, but there is still work to be done. We’re looking forward to supporting holiday let owners to get the most out of their business and helping them rise to the challenges they may face in the coming months and years.”
For holiday let owners looking to start up or expand an existing holiday let business in the future, please do get in touch.
To find out more about how The Cumberland could help your business, please click here.
To find out more about Host and Stay, please click here.