The short answer is - definitely yes!
VisitBritain.org are forecasting 35.1 million visits in 2023 (86% of the 2019 level and 18% higher than in 2022) and £29.5 billion spend (104% of the 2019 level and 14% higher than in 2022). If the latter figure is achieved it would be a record for the value of inbound spend in the UK in nominal terms, although adjusting for inflation it would be 87% of the 2019 level in real terms, in line with the trend in visitor volumes.
Flight bookings are currently a little weaker for those arriving in January than in late 2022 but very strong for March/April (above 2019 so far). Visits from European markets are forecast to recover quicker than long-haul overall, continuing the steady recovery seen this year, reaching 24.1 million in 2023, 88% of the 27.3 million visits in 2019. For long-haul markets, the forecast is for 11.0 million overseas visits to the UK in 2023, 81% of the 13.6 million in 2019, with significant variation across source markets as some regions (e.g. North America) recover relatively quickly while others (East Asia) lag behind.
Meanwhile, it is assumed that the COVID situation will not present fresh challenges to international travel and that restrictions will not be re-imposed; and that markets where outbound travel is currently slow or impossible will gradually recover / restart.
PwC are also forecasting that average hotel rates in London could reach up to £212.6 in 2023, an increase of 18 per cent on 2021, with moderates increases also set for the UK's regions as average daily rates (ADR) are pegged at £91.5 in nominal terms. 3-star and 4-start hotels are a direct competitor for apartments and airbnb’s across London. This indicates that rates for apartments are set to increase in 2023 as well.
What kind of returns can be expected?
Apartments and town-houses located in central London, ideally zones 1 to 2, should be generating up to 30% more revenue versus long-term rentals, after all the costs have been taken into account.
Which areas in London have the highest demand for short-term lettings?
General rule is that central London zones 1 and 2 have the highest demand for this type of lettings. Areas such as Covent Garden, Bayswater, Paddington, Soho, Chelsea, Holland Park, South Kensington, Fulham, Primrose Hill, Camden, Notting Hill, Clapham, Knightsbridge, Belgravia, Pimlico, Fitzrovia, Bloomsbury, Southwark, Westminster have the highest demand.
What to consider when buying a property for short-term rentals?
If the apartment is a leasehold property - one should consider whether the lease allows for this type of activity and if it specifies, what is considered a short-term let. In this situation share of freehold properties are a better choice, as this could be agreed easier with other freeholders.
Should I hire a property management company to help me manage my airbnb property?
Looking after an airbnb property is a time-consuming activity, that’s why many hosts choose to employ a professional airbnb management company in London, to take care of listing the property, guest communication, guest vetting, housekeeping and to address any maintenance issues that can arise during their stay. Get in touch with StayinLondon.co.uk to get your personalised quote or for any advice you might need setting up your own listing free of charge!
