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Investing in the UK’s “Staycation Summer”

18/07/2020

A survey has revealed that 77% of Brits are planning a UK staycation in summer 2020: driven, mostly, by the fears and restrictions that the COVID-19 pandemic has caused. With airlines and hotel chains having been severely impacted by the pandemic, investors with travel funds in their portfolios may be looking to diversify. Could our “staycation summer” be a good place to start?

Brexit + COVID-19 = good prospects?

After a successful year in 2018, the staycation market is expected to continue to boom. In addition to a reduced number of overseas holidays as a result of COVID-19, Gladfish Property believe that “Brexit is creating an environment where people are more likely to ‘staycation’”. 

Gladfish also highlights that there are numerous ways in which investors can take advantage of an increase in UK staycations – such as these. 

Pubs and restaurants

Although social distancing measures are in place, many of the UK’s pub and restaurant chains have now begun to reopen. Performance will, of course, be subject to consumer demand (and to the possibility of further lockdowns), but The Motley Fool suggests that FTSE 250 stocks like JD Wetherspoon, Marston’s and Mitchells & Butlers are three to watch.

Hotels 

With hotel room investment, says Gladfish, “you benefit from a known yield and a guaranteed capital return on a fixed-term investment”. 

Russ Mould from AJ Bell recommends Whitbread and Applegreen – especially now that lockdown has begun to ease. The former, he says, has raised £1 billion to protect it, while the latter – which has a majority stake in Welcome Break – has seen share prices rise since the beginning of lockdown. 

Leisure facilities

Whether it’s at home or away, investment experts believe that some leisure funds could be a good choice for investors.

Swimming pool business Compass Pools states that it has seen a 600% increase in demand for home swimming pools since the pandemic began, while Sue Noffke of Schroder Income Growth believes that Hollywood Bowl is a stock to watch. 

Meanwhile, Martin Cholwill of Royal London UK Equity Income believes that cinemas will be popular this summer, while Darius McDermott of Chelsea Financial Services believes that bonds that include Merlin Entertainments could be a good choice.

Holiday homes

With a rise in demand for UK-based holidays, could it be a good time to invest in holiday property?

Roma Finance is certainly expecting the number of people buying UK holiday homes to increase, and has, as a result, launched a new holiday let and serviced accommodation mortgage. The launch comes after they saw an increase in the number of enquiries about holiday let investment opportunities. 

Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.

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