A recent study conducted by Stripe Property Group, a prominent property development firm, projects a promising upswing for the UK’s holiday accommodation sector in 2023. After weathering a 24% contraction in 2021 due to the pandemic, the sector bounced back with a significant growth of 21% in the subsequent year.
The comprehensive analysis of the UK’s vacation accommodation market carried out by Barrows and Forrester gauged its expansion over the last decade, primarily relying on revenue data. The sector currently boasts an impressive market size of £2.54bn, representing a robust growth of 38% from the £1.8bn reported in 2013.
Regrettably, the exceptional growth trajectory was impeded by the pandemic’s devastating impact on the tourism and travel industry. In 2021, the holiday accommodation market shrunk by 24%, marking only the second annual contraction witnessed over the previous decade. This dip lowered the total market size from its pinnacle of £2.76bn in 2020 to under £2.1bn in 2021.
However, in a reassuring turn of events, the sector made a speedy recovery with a 21% growth spurt in 2022, elevating the market size to nearly £2.5bn. Projections for 2023 indicate a further 4% increase, although the expected £2.6bn will still linger around 4% below the pre-pandemic high.
James Forrester, Managing Director of Stripe Property Group, shared his insights, saying, “The UK holiday accommodation sector endured the harsh blow from travel restrictions and other factors during the pandemic, despite the surge in staycations. But the encouraging signs of rejuvenation and the continued growth projected for this year make it an appealing prospect for potential investors.”
He went on to add, “This resurgence should certainly pique the interest of those considering a foray into the property market, particularly those who might be seeking alternatives to conventional residential development investments. The sector presents a wealth of opportunities for shrewd investors to diversify their portfolios, whether it’s holiday accommodation, purpose-built student accommodation, or even commercial ventures.”