Although the American Hotel & Lodging Association is adamant that companies should resume large-scale business travel, hotels can’t rely on it to drive their recovery. Corporate executives don’t see the sector making a full rebound anytime soon — if ever.
Here’s a sampling of what the Daily Lodging Report provided to its readers this past week. If you’re not a subscriber, you should be. Don’t wait. Sign up now here.
Sunday, March 27
Hyatt Hotels announced they are terminating their association, contracts and relationships with Hyatt Regency Moscow Petrovsky Park in order to comply with sanctions and government directives. Meanwhile over at Skift Forum Europe in London, Accor CEO Sebastien Bazin made headlines by saying Accor does not plan to pull out of Russia. Bazin said they have been in countries of war probably 30 to 40 times over the last 50 years on different continents and never pulled out of any hotel activities at the time employees needed Accor the most. In Russia, Accor doesn’t even turn a profit with occupancy averaging 35-40 percent, even in good times. Bazin argued that their customers need a safe place to stay, arguing that if they closed up, Bloomberg, CNN or any of the people on the news would not be around and may not even broadcast. He also doesn’t feel Accor’s employees in Russia should be punished for government actions.
Skift Note: Hyatt had announced last month it would freeze new developments and suspend investments in Russia.
Monday, March 28
Fitch Ratings said they expect China’s tourism sector recovery to remain volatile in 2022 as a result of travel restrictions amid a resurgence of Covid-19 cases. The second half of 2021 showed domestic tourism numbers and revenue decline to around 50% of pre-pandemic levels from over 60% in 1H21 and remained weak going into 2022. Fitch said the government’s Covid-19 policies are largely driving the sector’s recovery path and that a rise in virus cases could weigh on tourism activities.
Skift Note: Lockdowns enacted by Beijing following Covid surges in the country have played a major role in Chinese hotel performance falling below the U.S. and Europe in recent months.
Tuesday, March 29
The American Hotel & Lodging Association is telling America that face-to-face meetings have undeniable advantages over virtual options, and that businesses and organizations that resume business travel and meetings more quickly are likely to have a competitive edge. The AHLA cited a study from San Diego State University that found 80% of millennials prefer in-person communications with colleagues. Business travel and in-person meetings facilitate productivity, build organizational strength and foster collaboration in a way virtual interactions cannot.
Skift Note: Despite the benefits that face-to-face meetings provide, corporate executives largely don’t see business travel making a full recovery anytime soon — if ever.
UNWTO reported international tourism continued its recovery in January 2022. The Russian invasion of Ukraine, however, adds pressure to existing economic uncertainties, coupled with many Covid-related travel restrictions still in place. All regions enjoyed a significant rebound in January 2022 from the low levels recorded at the start of 2021. Europe +199% and the Americas +97%, continued to post the strongest results, with international arrivals still around half pre-pandemic levels. The Middle East +89% and Africa +51% also saw growth in January 2022 over 2021, but still saw a drop compared to 2019. While Asia and the Pacific recorded a 44% y-o-y increase, several destinations remained closed to non-essential travel resulting in the largest decrease in international arrivals over 2019. By sub regions, the best results were recorded by Western Europe, registering 4x more arrivals in January 2022 than in 2021, but still less than in 2019. Additionally, the Caribbean -38% and Southern and Mediterranean Europe -41% have show the fastest rates of recovery towards 2019 levels. Destinations recording the best results compared to 2019 are: Seychelles, Bulgaria and Curacao, El Salvador, Serbia and Maldives, Dominican Republic, Albania, and Andorra, and Bosnia and Herzegovina. Among major destinations Turkey and Mexico saw declines as compared to 2019. The UNWTO said the war in Ukraine poses new challenges to the global economic environment and risks hampering the return of confidence in global travel. The shutdown of Ukrainian and Russian airspace, as well as the ban on Russian carriers by many European countries is affecting intra-European travel. It is also causing detours in long-haul flights between Europe and East Asia, translating into longer flights and higher costs. According to UNWTO, recent spike in oil prices and rising inflation are making accommodation and transport services more expensive, adding extra pressure on businesses, consumer purchasing power and savings.
Skift Note: The war in Ukraine — as well as travel restrictions not yet lifted — complicate the travel industry’s path to a further recovery.
Wednesday, March 30
IHG Hotels & Resorts and Sunview Companies officially opened the world’s first Atwell Suites property with the 90-room Atwell Suites Miami Brickell. The dual-branded hotel is in Miami’s Brickell neighborhood and situated on the top floors of the building shared with the Hotel Indigo Miami Brickell, which opened in March 2021. The first-ever Atwell Suites hotel features a spacious lobby with huddle areas, public co-working spaces, and lounge areas; an inviting bar; and a complimentary beverage station.
Skift Note: The Atwell Suites is one of six brands that IHG has added to its portfolio in recent years, which the company expects to help drive its growth.
Thursday, March 31
International arrivals to the Association of Southeast Asian Nations are projected to increase to 124 million in 2024 from 136.9 million in 2019. Projections for 2022 keep changing, so why should we put any faith in projections for 2024? GlobalData said 2024’s strength will be boosted by the region’s natural attractions and heritage, affordable connectivity, improved tourist facilities, rising consumer class, and proximity to India and China. Prior to the pandemic, the ASEAN region was growing at a CAGR of 7.7% between 2016 and 2019 but in 2020, inbound flows to the region dropped -78.8% year over year to 29 million. The member states’ over-dependence on Chinese tourism left them vulnerable. China constituted 23% of 2019 arrivals.
Skift Note: Southeast Asian nations such as Malaysia, Singapore and Thailand are taking steps to treat Covid as an endemic virus, which should make traveling to the region easier for prospective visitors.