By Ian McConnell

THE UK hotel sector faces continuing intensification of payroll cost pressures, with labour shortages “at a critical level”, and trading is not anticipated to return to pre-pandemic levels even by the end of next year, a survey shows.

Accountancy firm PricewaterhouseCoopers’ 2021/22 hotels forecast puts occupancy rates by the end of 2022 for London at between 70% and 90% of pre-pandemic levels. For other parts of the UK, occupancy rates are forecast at between 87% and 96% of pre-pandemic levels.

PwC sees the average daily rate for hotel rooms in London recovering to £112.26 next year, up by £27.78 on 2021.

It said other parts of the UK had “seen mixed fortunes throughout the pandemic”, declaring: “Staycations have provided a significant boost for coastal and leisure destinations, with occupancy and ADR in August 2021 significantly outperforming August 2019, but some cities and non-tourism destinations are still experiencing dampened demand.”

READ MORE: CalMac Scotland ferries: Caledonian MacBrayne should be treated as national treasure: Ian McConnell

PwC added: "For those areas boosted by staycation demand, summer 2022 may again see difficult trading conditions if international travel is back on the agenda for the domestic market, and pent up demand for guaranteed sun is released.

"The latest PwC research shows that 37% of people still plan to holiday within the UK in 2022. On balance, it is expected overall staycation demand to be similar to the summer of 2021 but be more evenly spread throughout the year."

READ MORE: Brexit: Ian McConnell: Is ‘falling dangerously behind’ a Johnson Cabinet speciality?

PwC highlighted its view that "the speed of recovery will be the major issue in 2022, but will be driven by factors outside of the sector's control; the pace and size of the return of tourism, international and domestic business and events".

The accountancy firm added: "An encouraging sign for hoteliers, when surveyed, 63% of people said they plan to take either more or the same number of holidays in 2022."