NEW YORK—Industry leaders were optimistic about the recovery during the “View from the C-Suite: Brand Leaders Discuss the Road to Recovery.”
The virtual conference, sponsored by The Wall Street Journal and Minibar Systems, was moderated by Christina Trauthwein, editor-in-chief of Hotel Business and InspireDesign, which hosted the event with NEXT Events.
The panelists disagreed with a recent forecast by HVS that RevPAR will not return to 2019 numbers until 2024 or 2025. “I’ve been thinking about that a lot… Obviously, HVS, as one of the leading consultancies for decades now, has access to a lot of great data and a lot of great minds,” said Jim Alderman, CEO, Americas, Radisson Hotel Group. “But like Vegas, someone’s got to take the over and someone’s got to take the under. And I’m just not sold that it’s going to take that long. And I don’t think any of us really necessarily can be—I’d much rather lean toward what I saw from CBRE and try to hang my hat more on a 2023.”
The recovery timeline also isn’t universal, he noted. “I think it’s segment by segment. In some cases, it’s sector by sector throughout the United States,” he said. “I think people will extend their drive time, and you’ll see different types of hotels come back a lot faster.”
Alderman said it was important for the industry to remain positive when thinking about the recovery. “I don’t think I’d be sleeping too well at night if I felt we were looking at a 2024 to 2025 recovery of RevPAR,” he said. “I think we’ve got to be more optimistic than that and model that behavior for our franchisees. Someone’s going to be right. If they’re right, it’s going to cost us all a lot more money and cost our franchisees a lot more money.”
John Russell, interim CEO, Red Lion Hotels Corporation, is very bullish on recovery. “I’m very bullish—a lot more bullish than my friends at HVS, I think,” he said. “I think CBRE said that we’re going to see signs of recovery in Q1 of 2021. I think we’re going to be more stabilized by mid-2022. You’ve already seen what’s happened in drive business even this weekend. A lot of the hotels have doubled their occupancies. You’re going to see a lot more of that drive business, RV business, leisure business come back very quickly. People want to see friends and family, want to go to national parks and state parks, beaches.”
Although leisure travel is already seeing increases, business travel will take a bit longer. “Unfortunately, the business traveler, the group business, you’re going to see maybe into October, November start to come back,” he said. “Of course, group business and exhibit business, it’s going to take a lot longer. But I’m pretty bullish about mid-2022. I really think we’re going to be back.”
David Kong, president/CEO, Best Western Hotels & Resorts, expressed cautious optimism. “We are, by nature, an optimistic group and we are pragmatic,” he said. “We recognize the reality, but at the same time, I believe in not talking to ourselves into a problem we don’t have. I think the recovery is not going to be like a V-shape or U-shape. It’s not going to be a straight up kind of recovery. It’s going to be like a jagged swoosh because I think we’re going to have some encouraging news and then some of this disappointing news.”
He agreed that business travel will be slower to recover. “For as long as we don’t have a cure and vaccine, we don’t have the confidence in business and consumers,” he said. “Businesses have to feel comfortable about spending money. They are limiting travel right now because they want to be fiscally responsible and conservative, and there’s a duty of care today at travelers as well, so that’s why they’re limiting the amount of traveling on the business side. But for consumers, they need to feel comfortable about their health and welfare and their families as well. I think for all of those reasons it’s going to be a little slow. Hopefully, there will be a vaccine and a cure very soon and that will speed up the recovery.”
Scott LePage, president, Americas, Wyndham Hotels & Resorts, echoed the other panelists’ sentiment of confidence. “I think our role in the recovery is to remain confident in our industry,” he said. “We’ve kept more than 90% of our hotels open throughout the challenge. We’ve done it with good business and good processes. That’s really been what I think the industry has done a nice job of overall: coming together, making decisive actions even in the midst of some doubts that’s out there about what’s going on, but remaining confident in our business overall.”
When asked about what the government’s role should be in helping the hospitality industry recover, he hopes it has the confidence to let the industry move things forward itself. “The government plays a key role in having the confidence in the hospitality organizations that are out there, in giving us the ability to run our hotels, to come up with the right processes and procedures, to work together with AHLA, AAHOA and the other professional organizations to figure out the path forward and let us design and architect the recovery for our industry,” he said. “I do feel like they’ve done a good job stepping in, helping out from a business perspective. A lot of our owners are small businesses and so PPP loans, IDA loans have come at the right time. We’ve heard some really good stories of owners who said, ‘I didn’t know where to turn. And when that money came in, it gave me the ability to get through the most challenging parts of this.’”
If this past Memorial Day holiday weekend is any indication, the industry is already on the road to recovery. John Cohlan, CEO, Magaritaville Holdings, reported that all of his company’s properties were at 100% occupancy. “…In real time, we happen to be in many of those drive-to leisure markets and 2023 happened this weekend,” he said. “We were 100% occupied across the portfolio and rate didn’t miss a bump. And customers were thrilled. Again, we’re in a very different position… Most of them are in drive-to leisure destinations, from the Smoky Mountains in Gatlinburg and Pigeon Forge [TN] to Lake of the Ozarks [MO]…to Orlando [FL], to Biloxi [MS]—all sold out properties, all at great rates.”
He said, “Some of that may be pent-up demand, so it will be very interesting to see what happens as the summer unfolds. But the bookings are very, very strong. The July bookings in particular. I think that reinforces a lot of the positive instincts that people on this panel were sharing before.”
Look for complete coverage in the July 15 issue of Hotel Business.